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Cuba's top cigar maker smokes sales record on booming high-end demand

FILE PHOTO: XXIII Habanos Festival opening in Havana

By Dave Sherwood

HAVANA (Reuters) - Cuba's top cigar maker Habanos said on Monday its sales had soared to a record $721 million in 2023, a benchmark the company's executives attributed to booming demand for its most luxurious, high-end smokes in markets including China.

Habanos co-president Luis Sanchez-Harguindey said revenues jumped 31% over the previous year as the company pushed promotion of cigars like its Trinidad and Cohiba brands, exclusive smokes once reserved as gifts for foreign diplomats on the communist-run island.

"This is a year of records," Sanchez-Harguindey told reporters on the sidelines of the company's annual festival outside the Cuban capital Havana.

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Soaring sales came even as Cuban growers struggle to recover from Hurricane Ian in 2022, which flattened infrastructure and ravaged growing areas in a country already suffering its worst economic crisis in decades.

The 2023-2024 growing season, now entering its homestretch, will fall about one-third short of the pre-hurricane planting area, according to Cuban state-run media. It is not expected to return to normal levels for the 2024-2025 season, the local growers' association said.

"We've been able to compensate for that reduction in volume with value," Sanchez-Harguindey said, adding that Cuban growers had also focused resources on their most efficient, high-end farms.

Cuba's luxuriously smooth tobacco has long topped the cigar industry, with aficionados touting the Caribbean island's unique variety of tobacco, rich soils, and ideal climate - as well as Habanos' insistence on rolling its cigars by hand.

Executives told reporters that China - whose smokers increasingly covet high-end Cuban cigars - once again topped sales in terms of value, followed by Spain, Switzerland, Germany and Britain.

Habanos S.A. is owned 50% by the Cuban government and 50% by a consortium of Asian investors under the umbrella group Tabacalera.

Habanos plans to keep its entire production process on Cuba, said Sanchez-Harguindey, as per Protected Designation of Origin rules.

(Reporting by Dave Sherwood, Editing by Rosalba O'Brien)