ITC Bites Into Cigar Biz, Ties Up With La Aurora

Source from:  The Economic Times (India) 03/31/2010

KOLKATA: The next time you crave for a cigar, you needn't a splurge Rs 2,000 on a Havana. ITC, the country's largest cigarette maker, will soon offer premium handrolled cigars at less than half the price. The $6-billion cigarettes-to-hotels conglomerate has teamed up with La Aurora, one of the oldest cigar makers run by the Leon Jimenes family of Santiago in the Dominican Republic, to unveil a mint-fresh line of premium handrolled cigars, a person close to the matter said. The cigars will be rolled out under the Armenteros brand and be manufactured at La Aurora unit in the Caribbean. "Their blending expertise is unique and is likely to give this new offering a differentiated positioning," said the person requesting anonymity. An ITC spokesperson confirmed the development, but did not share details. The development makes ITC the first Indian company to enter the Rs 30-crore fledgling cigar business in the country. The Armenteros brand of cigars will jostle with imported varieties including Romeo Y Juliata, Monte Christo, Partagas, Cohiba and Davidoff. "Though cigars as a category is still at a nascent stage, the segment is now seeing an upsurge in demand with a new section of upwardly mobile Indian consumers exploring cigars as a category," a person involved in cigar trade said. Although La Aurora will manufacture them, the Armenteros cigars will be customised to ITC's specifications and adhere to its stringent quality standards. "The range of Armenteros handrolled cigars portfolio reflects ITC's unparalleled tobacco lineage," said the person quoted first. Makers of Gold Flake, Classic and Navy Cut brands, ITC dominates the country's cigarette market with more than 80% share. Trade sources close to the development said ITC is uniquely positioned to develop a cigar portfolio for the Indian connoisseur as the company has decades of experience in the tobacco business. The Armenteros cigars, which will be available in myriad shapes and sizes, will be priced between Rs 450 and Rs 900 a stick and available exclusively at tobacco selling outlets, at select hotels, fine-dining restaurants and exclusive clubs. The portfolio will be available in eight different packs comprising 3, 5 and 10 cigars. ITC plans to launch its cigars in Delhi NCR and Mumbai that together account for a major share of the Indian cigar market. Subsequently, it will introduce the brand in other metros as well. They attribute the fascination to increasing disposable incomes and exposure to global lifestyle, driving expenditure growth rates of 20% per annum in this category. Enditem