A potential upcoming cigar company acquisition. Exclusive!

[jhedrick83]

Timing is a little odd, or maybe it's all part of the plan. Any of you guys read the Rubin interview in the latest Cigar Aficionado? You remember a few years back when the CEO of Domino's went on a bunch of commercials and basically admitted that their pizza sucked really bad, but they were working to improve it?

The owner of Alec Bradley basically did the same thing. He said that demand outstripped their ability to produce a quality product in 2012 after Prensado was named CA's #1 cigar, and was pretty frank about how awful their cigars were for a year or two. I remember buying a 5er of Prensados in 2013 and none of them burned right, and I have mostly given up on the brand ever since.

I know it seems a little off-topic, but maybe he did this for a little publicity and to try to wash the bad taste out of people's mouths as part of the acquisition deal. On the other hand, he also talked about his sons working for the company and how important that was to him.

This is exactly what I was going to post about! I wouldn't be surprised if that was the case. Honestly, for me, I know it was supposed to be an outlet for a giant mea culpa but I got done reading it and was glad I gave up on AB after a series of Tempus that were horrid construction. I wouldn't exactly say the interview won me back over.

I worry that FDA regulation will kill the market by generating a lot of acquisitions like this. Can the big boys make great cigars? Yes then can. Do they do so as frequently as the little guys do? IMO, not even close. I'm not even talking about LEs and shop exclusives and all that jazz. Just smaller brands like Illusione, Tat, Crowned Heads, etc. FDA regulation is more leverage for the big dogs to squeeze out the competition because they have the capital. I don't really like the idea of less competition in any arena and it kills innovation.

For example, look at Tesla Motors. To me, what I like best about them isn't necessarily the cars it's the innovation they are driving. Before the initial Tesla Roadsters and the Model S several years later electric cars were a joke. GM built some prior and couldn't even make them popular in California of all places. So they literally crushed the whole fleet. Hybrids were ok but all electric was "too far off" technology wise. Now all the major car companies are scrambling to catch up or pass Tesla. I highly doubt any of that happens without the ability of a small time player with a big idea and the kahones to go for it. I'll get off my soapbox now...

[Cardinal]

I just didn't understand why they were bringing out a new blend seemingly every 5-6 months (it seemed) if they were having so many problems. I loved the Presnado, then they just ruined them with lousy combustion and sloppy construction. I was fixin' to get a Prensado tattoo on my caboose before they went to hell.....

I agree 100%. I had a Family Blend early in my smoking career and loved it, same with a Prensado. Then yep, they start trying to roll out a million lines all while their core ones are in bad shape. Didn't make sense.

This is exactly what I was going to post about! I wouldn't be surprised if that was the case. Honestly, for me, I know it was supposed to be an outlet for a giant mea culpa but I got done reading it and was glad I gave up on AB after a series of Tempus that were horrid construction. I wouldn't exactly say the interview won me back over.

I worry that FDA regulation will kill the market by generating a lot of acquisitions like this. Can the big boys make great cigars? Yes then can. Do they do so as frequently as the little guys do? IMO, not even close. I'm not even talking about LEs and shop exclusives and all that jazz. Just smaller brands like Illusione, Tat, Crowned Heads, etc. FDA regulation is more leverage for the big dogs to squeeze out the competition because they have the capital. I don't really like the idea of less competition in any arena and it kills innovation.

For example, look at Tesla Motors. To me, what I like best about them isn't necessarily the cars it's the innovation they are driving. Before the initial Tesla Roadsters and the Model S several years later electric cars were a joke. GM built some prior and couldn't even make them popular in California of all places. So they literally crushed the whole fleet. Hybrids were ok but all electric was "too far off" technology wise. Now all the major car companies are scrambling to catch up or pass Tesla. I highly doubt any of that happens without the ability of a small time player with a big idea and the kahones to go for it. I'll get off my soapbox now...

I was actually half-tempted to try a 5er of Prensado again before I read this thread about a potential sale looming. I figured better late than never on the apology, and something like that interview is pretty rare, so...now I don't know.

I'm pretty much with you on all the other stuff though. At least if Fuente, Oliva, and My Father hold out for a while I'll be ok.

[AndyCAYP]

From Altadis' point of view it makes perfect sense - if they're scared about the FDA issue, which they have every right to be, they will need ownership of established brands that had been marketed prior to the FDA's shelf date. They will need as many of those brands as possible, because I think everything is assuming that if the FDA gets the control they want the approval of new brands will slow to an absolute crawl.

I'm surprised we haven't seen more of this, to be honest. There are a lot of mid-level companies that could leverage FDA legislation into an increase in the worth of their business, at least in terms of how Altadis and General/STG value them. And/or I wouldn't be surprised if a few mid-level companies merged to better position themselves against FDA restrictions.

[jhedrick83]

I agree 100%. I had a Family Blend early in my smoking career and loved it, same with a Prensado. Then yep, they start trying to roll out a million lines all while their core ones are in bad shape. Didn't make sense.



I was actually half-tempted to try a 5er of Prensado again before I read this thread about a potential sale looming. I figured better late than never on the apology, and something like that interview is pretty rare, so...now I don't know.

I'm pretty much with you on all the other stuff though. At least if Fuente, Oliva, and My Father hold out for a while I'll be ok.

If Fuente was ever bought out, I don't know what I would do.

[Demuths1770]

if there is any truth to this i think in a few years AB will be putting out some great cigars again. with a larger company owning them they can buy more tobacco to store to put out the great cigars again. i think its the same reason DE sold out. Liga unicos have become some what easier to get but i think when they bought the amount of tobacco needed to pus the unicos out like they have they realized they probably couldn't do it long term because of price and storage issues hence the sell out to a large company. same thing AB is probably wanting to do now.

[allusred]

Just gave this a quick read to catch up after a few hours sleep.
I think one of the problems with the current situation is the uncertainty regarding the impact FDA regulation may have on all the companies.
But not the least could be getting approval for new brands.
Some companies gobble up other smaller outfits that 're making a profit from a well made brand or brands.
Go all out to promote the newly added brand, or brands, until sales are at a certain level.
Then cut back on the advertising $ spent on those brands.
Cut costs on production,everywhere and in every way they can.
Quality suffers but, at least for some time, the brand woll continue to bring in the high level of $.
Once customers become aware that what they've been getting recently is no long worth the price and sales decline.
The big company lets that once decent brand slip further, shifts the promotional $ into pushing their more recently acquired brands in a repeat of the same tactic.

[DogRockets]

Timing is a little odd, or maybe it's all part of the plan. Any of you guys read the Rubin interview in the latest Cigar Aficionado? You remember a few years back when the CEO of Domino's went on a bunch of commercials and basically admitted that their pizza sucked really bad, but they were working to improve it?

The owner of Alec Bradley basically did the same thing. He said that demand outstripped their ability to produce a quality product in 2012 after Prensado was named CA's #1 cigar, and was pretty frank about how awful their cigars were for a year or two. I remember buying a 5er of Prensados in 2013 and none of them burned right, and I have mostly given up on the brand ever since.

I know it seems a little off-topic, but maybe he did this for a little publicity and to try to wash the bad taste out of people's mouths as part of the acquisition deal. On the other hand, he also talked about his sons working for the company and how important that was to him.

Do you have a link to this by chance? I'd love to read it.

[Cardinal]

Do you have a link to this by chance? I'd love to read it.

I just searched and cannot find it, must not be online yet. I get the print magazine, one of those free magazine deals.