Seven Hundred Fifty Cigars, One Price Increase, and a Tariff Bill That Keeps Growing

On August 3, Scandinavian Tobacco Group did something no major cigar company has done in recent memory: it raised prices on nearly 750 products on the same day. The increase spans both of STG's American divisions, Forged Cigar Co. and General Cigar Co., touching brands that sit on shelves in virtually every tobacconist in the country. Alec Bradley, CAO, Macanudo, the non-Cuban Cohiba, Punch, Partagas, La Gloria Cubana, Diesel, Hoyo de Monterrey, and El Rey del Mundo are all on the list. If you have bought a mass-market premium cigar in the last decade, there is a strong chance one of these brands was in your humidor.

The structure of the increase is more nuanced than a flat hike. For more than 80 percent of the portfolio, wholesale prices rose by an average of 4.2 percent. A little over a hundred items stayed at their current wholesale price. But around 2 percent of the catalog received double-digit increases, with the Punch Deluxe Chateau Maduro topping the list at 15.3 percent. Gene Richter, STG's vice president of sales for North America, told retailers in a letter that inflation drove the decision.

Layered on top of the wholesale increase is a separate charge that affects every cigar STG imports, including the hundred-plus items whose base price did not move. Since the implementation of the Trump administration's tariff scheme, STG has added an import charge to all orders. That charge climbed from 6 percent to 7 percent on the same August 3 date. The timing is no coincidence. The previous week, the administration introduced a new round of tariffs that kept Honduras at 10 percent but raised the rate on cigars from the Dominican Republic and Nicaragua from 10 to 12.5 percent. STG owns factories in all three countries.

Richter told retailers that if the tariffs are removed, STG will drop the import charge. That is a conditional promise, not a guarantee, and it leaves the cigar industry in an unusual position: the price of a Macanudo or a CAO is now directly tied to trade policy. The Cigar Association of America has already testified before the Section 301 Committee arguing that premium cigars cannot be produced domestically at scale and that tariffs will shrink the federal excise tax base while raising costs for consumers and the 3,500 independent tobacconists who sell these brands. The committee has not yet issued its final recommendation.

For smokers, the practical effect is simple. The cigar you bought last month will likely cost more next time you walk into the shop. Some prices moved a little. Some moved a lot. And the ones that did not move at all still went up, because the charge for bringing them across the border did.