HAVANA (Reuters) – Cuba’s state cigar monopoly, Habanos S.A., said on Tuesday that China had displaced Spain last year as its top market but rising demand in the Asian giant could not compensate for declines in sales elsewhere, with global revenue down 4% to $507 million.
Curbs on travel last year due to the pandemic dealt a serious blow to demand from countries reliant on tourism as well as sales at duty free, Habanos said in a statement.
Cuba’s hand-rolled cigars, which include brands such as Cohiba, Montecristo and Partagas, are considered by many as the best in the world.
Habanos usually holds a festival early in the year for wealthy tobacco aficionados and retailers during which they tour plantations and factories and meet in the evenings to puff on Cuban smokes at extravagant parties.
This year, though, with Cuba grappling with its worst outbreak of COVID-19 yet and other countries also struggling to curb contagion, it is instead holding three days of virtual events, which kicked off on Tuesday.
“2020 has been a challenging year not just for our business but for the whole of humanity,” Habanos said in a statement.
Cigars are one of the top exports for the Cuban economy, which shrank 11% last year as the pandemic and increased U.S. sanctions exacerbated the cash crunch.
The Caribbean island cannot sell its signature export to the biggest market worldwide for cigars, the United States, due to the decades-old U.S. trade embargo.
Europe remains the top regional market for Habanos, accounting for 50% of sales, followed by the Asian-Pacific area, which accounts for 16.2%, according to the statement.
The state-run Cuban News Agency cited Habanos officials at the event on Tuesday as saying that sales in Europe and Asia-Pacific had risen 2% and 10%, respectively. Revenue dropped 31% in Africa and the Middle East, however, and 21% in the Americas.
(Reporting by Sarah Marsh and Nelson Acosta; Editing by Leslie Adler)