- 37 - 



seems likely that production of the clear Havana cigars and the predomir/ 

 Havana filler cigars taken as a group would have ceased completely by the ei 

 of about l : l- years. 



The problems of making and marketing cigars entirely new in their com- 

 position to replace these predominantly Cuban tobacco cigars --estimated I 

 comprise nearly one-tenth of the present market--are regarded by many in the 

 industry as virtually insurmountable . Experimental blending with new tobaccos, 

 market testing of new brands, promotional work, acquiring sufficient inventories 

 of new tobaccos and experience in handling them: all these would present prob- 

 lems and involve great financial risk. This would be especially true for the 

 medium-sized and small manufacturers that have made only clear Havana cigars. 

 The uniqueness of the Cuban tobacco that is utilized in cigars almost wholly 

 constituted of Cuban tobacco seems well established. The great differences 

 between prices paid for Cuban tobacco utilized in these cigars and the prices 

 of both other Cuban tobacco imports and non -Cuban tobacco imports lend support 

 to this. Generally, manufacturers have stated that they know of no other to- 

 bacco that could suffice for this group of cigars. Some would strive to develop 

 substitute cigars, and others have indicated that they probably would go 

 out of business after using up stocks. In order to stretch stocks, marginal 

 lines and shapes of cigars would be eliminated. Manufacturers terminating 

 their operations would hope to reopen if a stoppage did not last too long. The 

 longer a cutoff was in effect, the smaller is the likelihood that former 

 customers and markets could be regained. There is no way of knowing in advance 

 whether and to what extent cigar smokers unable to obtain cigars that are pre- 

 dominantly Cuban tobacco would desist from cigar smoking. It appears reasonable 

 to assume that such smokers would tend to shift, particularly to the better 

 cigars in a similar price range that are made with blended fillers. A small 

 fraction of smokers would probably seek to buy some cigars in the luxury class 

 imported from other countries. 



Analysis of the situation facing manufacturers of blended filler cigars 

 is similarly complicated by the fact that stocks of Cuban tobacco held for the 

 production of this type of cigar cannot be separated from stocks destine 

 the predominantly Havana filler cigars. On Oct. 1, 196l, manufacturers 

 predominantly Havana filler cigars and blended filler cigars, and leaf dealers 

 held combined stocks of Cuban tobacco amounting to 3^ million pounds -- 

 unstemmed weight; included in this figure are part of the holdings of one 

 manufacturer of both clear Havana and blended filler cigars. The combirv 

 stocks level of this group was one -eighth less than a year earlier but s 

 stantially higher than 2 years ago. Based on the recent 3 -year avera* 

 the Oct. 1, 196l, stocks are estimated to be sufficient for about 17 : 

 combined production of blended filler cigars having Cu ^bacco as part of 

 the blend and the cigars with Cuban tobacco composing all or nearly all the 

 filler. On the basis of indicated curtailed use of Cuban tobr. £ the 

 current marketing year, Oct. 1 stocks may be suf 1 



average. Again, it is emphasized that these are a v durat 



the holdings of an individual company could vary marked "ran the ave 



