A possible end to the American trade embargo on Cuba has intensified a legal battle between cigar maker Swedish Match of Stockholm and Imperial Tobacco Group of Bristol, England. Both companies want exclusive rights to sell Cuban-made cigars in the United States, the world’s largest market for premium cigars.
According to Bloomberg News, Swedish Match sells cigars in the United States made in Honduras and the Dominican Republic under Cuban brand names which it bought from families that fled Cuba after Fidel Castro seized their cigar companies in the 1960s.
Imperial distributes Cuban-made cigars under many of the same names to the rest of the world through an agreement with the Cuban government monopoly, Cubatabaco.
From the Bloomberg article:
Swedish Match and Imperial Tobacco both sell Dominican-made cigars in the United States and together account for almost half of the sales in a U.S. market for premium cigars that the Swedish company estimates at $850 million annually.
After cigar makers fled Cuba, Cubatabaco began exporting cigars under brands such as the Menendez family’s Montecristo and H. Upmann, and developed new brands, such as Cohibas.
Because of the embargo and U.S. court decisions, Cubatabaco couldn’t keep the trademarks in the United States, and General Cigar bought brands from the refugees.
Through an acquisition, Imperial owns a subsidiary that took the same stance, buying brands such as Montecristo from exiled families.
That created the divided cigar market, in which one company owns a brand such as Partagas in the United States and another does so around the world.