Switzerland: Cigar Czar Fights for the Right to Light up

Source from:  Business Day 01/08/2016

Stand in Zürich's Paradeplatz, where trams rattle past the head offices of Switzerland's biggest banks, and you catch a distinctive whiff in the air: tobacco smoke.

Smartly dressed bankers light cigarillos between meetings. A boutique window displays fat Honduran cigars.

Switzerland is not just about conservative banks or Alpine scenery. It is a leader in smoking pricey cigars. Spending per head on cigars is the highest in the world, according to Euromonitor. Expensive cigars go "hand in hand" with Switzerland's upmarket image, the research firm noted recently.

Cigar smoke fits with the country's blend of right-wing and liberal politics favouring personal freedoms, particularly for rich businessmen.

Emblematic of Swiss cigar culture is Heinrich Villiger, the 85-year-old owner of the Villiger Söhne cigar company, and an importer of Cuban cigars into Germany, Poland, Austria and Switzerland.

He has spent a lifetime promoting rolled tobacco leaf products. Nicotine, he says, calms his mind. In two hours, he happily chomps through three cigars.

Yet Villiger is anything but relaxed about the industry's prospects. The brother of a former president of Switzerland, he is grabbing headlines in the country for opposing plans to tighten restrictions on the tobacco industry. A bigger target is the World Health Organisation (WHO) in Geneva.

"The WHO has declared war against our industry - they want to kill us," Villiger says. Margaret Chan, WHO director-general, "has said tobacco is doing so much harm, this industry must be destroyed…. She has said 'we - the WHO - want to kill this industry by 2040'."

Even in cigar-friendly Switzerland, his fighting spirit is striking. There is no confirmation that Chan used those words and the WHO denies it has any such target for abolishing tobacco; its objective is "to alleviate the suffering and death caused by tobacco-related diseases".

At his stage in life, however, Villiger has little to lose by defying politically correct wisdom. Would he like to meet Chan? "No, no, I would not like to meet her," he laughs. "She's a terrible woman."

The Villiger family's cigar company - Europe's fifth-biggest by market share - was founded by his grandfather in 1888, producing Swiss Stumpen, or cheroots, in Pfeffikon, near Lucerne.

Its overseas expansion began in 1910, when it set up a manufacturing subsidiary just over the Swiss border in Waldshut-Tiengen, Germany, to avoid import duties.

Villiger visited Cuba before and after the 1950s revolution, later establishing joint ventures to import its cigars. Half his 1,500 workforce is in Indonesia, where it is cheaper to hand-work tobacco.

Villiger lives on the other side of the Rhine from Waldshut-Tiengen, in the country of his birth. "I'm a real Swiss. I'm not going to live in Germany," he says.

His hair and beard are white, but Villiger is sprightly - proof that a life of tobacco does not always mean an early death. He does not dispute that tobacco is dangerous - "I prefer to say 'it is not good'" - but argues that cigars are healthier than cigarettes if smoke is not inhaled.

The WHO dismisses such arguments as creating an "illusion of safety".

"We have the pleasure, the taste in the mouth, not in the lungs," Villiger says.

He recommends smoking only two-thirds of a cigar because the stump acts as a filter. "For us, it would be better if they only smoked half," he laughs.

No matter how defiantly he smokes, however, Villiger cannot escape economics. European cigar sales are falling. Turnover at the Villiger family company has stabilised at about €200m a year. Switzerland accounts for only about 10% of its sales by units.

"We have a new generation of young managers (in Switzerland) who come out of the office at 5pm or 6pm and sit in a café and smoke a cigar, but this is a small minority," Villiger says.

And cigars are an overwhelmingly male taste. Women "may smoke a small cigarillo, but it is not elegant".

Late on a Friday afternoon, with grey winter skies outside, Villiger cuts a lonely figure in the Waldshut-Tiengen factory established by his grandmother. Most employees have left for the day; a few machines clatter away.

He starts late, he says, often staying until 10pm, lighting a cigar at 8pm or 9pm. Six years ago, he had a heart attack.

"When I arrived at the hospital, they didn't know who I was," he recalls. "The first question was, 'Are you a smoker?' I said 'Yes'. They asked: 'How many a day?' I said 10. So my cardiologist said I should cut back. I'm smoking three or four a day."

Villiger is "disappointed" that the Swiss government is heeding WHO advice and tightening tobacco legislation. Politicians, he says, are interested in only re-election and "the tobacco sector is not an important industry".

His younger brother Kaspar was defence and finance minister in the 1990s, and served two years as president.

There are few prominent Swiss cigar smokers. An exception is Nick Hayek, CE of Swatch, the Swiss watch company, who chomps away on cigars from the Dominican Republic. Like Villiger, he finds the Cuban variety too strong.

Villiger tried diversifying. A keen cyclist, he bought a Swiss bicycle factory 20 years ago, but it burnt down and he had inadequate insurance.

Then, after the collapse of the Berlin Wall, he bought Diamant, the East German bicycle company. "I really believed in bikes," he says. However, he failed to turn the business around.

"The banks said, 'Mr Villiger, think it over: all the money you make with cigars, you lose with your bike business. It makes no sense'." In 2002, he sold Diamant to Trek, the US bicycle company.

Villiger hopes the company's family ownership will continue. None of his four children or nine grandchildren is interested in joining the business, so he is looking for an external CE.

It is a sentimental attachment. After 65 years in the business, he says he knows of only one company employee who died of lung cancer. "He was inhaling cigar smoke."

The WHO "says there are millions of deaths, but I don't know who counts them…. We all die sooner or later."

He draws deeply on the Brazilian San'Doro cigar resting between the second and third fingers of his right hand. "I'm 85. I'm very aware that sooner or later it will come to the end. I smoke four cigars a day…. Will I count as a smoker's death?"

Swiss government plans to toughen tobacco restrictions could be diluted significantly after a political shift to the right in Switzerland's national elections in October.

A draft tobacco law unveiled last month would introduce a countrywide ban on sales to under-18s, further restrict advertising and treat e-cigarettes in the same way as tobacco products.

The rules would not go as far as elsewhere in Europe and the Swiss proposals could be watered down in parliament - or thrown out in a national referendum. Enditem