Why Are Cigars So Expensive?

Unlike cigarettes, the cigar market has been at a steady pace in terms of the products being produced. The brands that manufacture and produce these tobacco products often prioritize quality over quantity, ensuring they provide the best cigars out there.

However, for the past few years, cigars have continued to experience a significant increase in price. A cigar smoker, especially a long-term one, can immediately tell how the retail price of tobacco products has gone up. This then leaves a number of cigar enthusiasts to either cut down their spending on their beloved cigars or opt for other tobacco products like cigarettes.

Today, we’ll explore why cigars are becoming so expensive, especially here in Canada. NativeSmokes4Less is here to uncover a number of reasons behind the continuous increase of cigar prices and how the tobacco industry responds to this seemingly unstoppable trend.

Why Are Some Cigars So Expensive?

Cigars, as opposed to cigarettes and other tobacco products, are naturally more expensive. The high cost of a cigar stems from its manufacturing process. Regardless of the brand, a cigar will often take a very long time and require extensive manual labour processes before it can be produced, packaged, and shipped to a customer.

You see, cigars are tobacco products made with utmost care. From the moment a tiny seed of tobacco is planted until leaves grow from the plant, cigar makers ensure that the quality of the tobacco elements is preserved well. Once tobacco leaves are harvested, they are hung in a curing barn to dry and turn brown. The cured tobacco is then unpacked and subjected to fermentation.

The fermented tobacco pile is subsequently separated and laid on drying racks to air out. Afterwards, it is repacked and stored for aging. After a few years, the aged tobacco is unpacked again, rehydrated, and categorized based on colour. Even the outer wrapper leaves are de-stemmed, which is often carried out either by hand or through a stripping machine. 

The aged tobacco will then be rolled to create the cigar based on a cigarmaker’s blend. The blend is typically comprised of specific tobaccos to guarantee a smoking experience that’s unique for a brand.

Given how complicated the cigar-making process is, cigar brands would naturally value their products at a higher range as opposed to cigarettes, which are typically made by automated machines.

But aside from the meticulous process of making cigars, some cigars have also become expensive nowadays due to supply and demand. Even though the demand for cigars is high, their supply all over the world remains low. It then pushed the premium cigar market to increase the price of the cigars.

Then, there’s the government taxes.

Different countries have consistently raised the taxes on tobacco products, including cigars, over the past decade. By increasing these taxes, governments aim to reduce the number of people who rely on tobacco products, particularly the youth.

All these factors contribute to the continuous increase of cigar prices, pushing consumers to decide if they still want to continue buying these tobacco products, cut their spending towards cigars, or completely ditch cigars and opt for cheaper tobacco or nicotine products.

Why Are Cigars So Expensive in Canada?

Cigars, as discussed earlier, tend to boast higher production costs than cigarettes. It then pushes cigar makers to put a markup on the prices of these products. However, given the number of cigar smokers in Canada, it somehow pushed the government to impose taxes as a way to deter people from using them.

In Canada, cigars were considered the most popular tobacco products other than cigarettes, according to data released by the Canadian Tobacco and Nicotine Survey (CTNS). Approximately 2.4% of Canadians aged 15 and above reported smoking cigars within the past 30 days. Notably, young people aged 15 to 24 have been identified as having the highest prevalence of cigar use.

Through these figures alone, authorities in the country are keen on pushing the number of people using cigars low. One way to do this is to increase the taxes imposed on cigars every now and then.

Last April 1, 2024, the excise duty rates of cigars alongside other tobacco products were adjusted to follow the provisions set by the Excise Act, 2001, which mandates an adjustment of the said rates annually. For cigars, the adjusted rate of excise duty is set to $36.07829 per 1,000 cigars. 

Additionally, an extra duty per cigar was imposed, as per Schedule 2 of the Act. The rate of this additional duty is set at the higher of $0.12968 or 88% of the sale price (in the case of Canadian-made cigars) or the duty-paid value (in the case of imported cigars).

Aside from federal excise duties and taxes, cigars may likewise cost more and become more expensive depending on the provinces they are sold. Provincial governments, after all, can also impose taxes so they can help reduce the number of people getting into cigars and get enough revenues for the projects related to diminishing tobacco use and promoting public health.

So, regardless of the cigars you use, expect their prices to soar and continue to increase given the amount of taxes added to the products. Through federal and provincial excise duties and taxes, the prices of cigars you often purchase will continue to increase.

As time passes, many people might find cigars to be an extremely luxurious product, pushing them to just buy alternative tobacco products like cigarettes.

Why Are Cuban Cigars So Expensive?

There are many types of cigars that are available in the market today. One of them is Cuban cigars.

Cuban cigars are products meticulously crafted in Cuba from tobacco grown within its borders. They have garnered a global reputation thanks to their exceptional quality, which makes them one of the world’s finest cigars. Their popularity even makes the cigars one of the most valuable products in the country, accounting for over a quarter of Cuba’s export earnings.

The filler, binder, and wrapper used to manufacture Cuban cigars often originate from various places in Cuba, with Pinar del Río province, Vuelta Abajo, Semi Vuelta, and the Viñales region being the prominent producers of tobacco leaves.

Since Cuban cigars are popular all over the world, it would be impossible not to see them in every tobacco shop. Unfortunately, some parts of the world don’t sell these cigars. As a matter of fact, they are prohibited from being sold in the United States of America. But here in Canada, you can practically purchase these cigars as long as they come from an authorized store or seller.

Now, given how premium Cuban cigars are, one could simply expect the high prices associated with these tobacco products. However, Cuban cigar prices have soared significantly over the past few years, leaving enthusiasts contemplating the duration of this price hike.

There are a couple of potential reasons behind the successive price increases of these premium cigars.

• Demand for luxury products: One simple reason behind the price increases of Cuban cigars is the demand for luxury goods. As the world continues to recover from the drastic changes caused by the COVID-19 pandemic, many individuals seek to get their hands on high-end products, which include Cuban cigars. Consequently, cigar manufacturers find it challenging to meet the growing demand for their products, pushing the prices of cigars to new heights. Cigar making, after all, is a tedious and meticulous process that takes years to complete.
• US trade embargo: The longstanding and intricate relationship between the United States and Cuba has led to a series of challenges for the Cuban cigar industry. Recently, the US trade embargo has restricted the amount of products that can be exported to the United States. One of the products that have been directly affected by this embargo is Cuban cigars. Regrettably, this embargo has resulted in the illegal sale, trade, and import of Cuban cigars, making them a luxury product and a rare commodity. This then resulted in higher retail costs.
• Expensive raw materials: Additionally, premium Cuban cigars have possibly increased in price due to the rising cost of raw materials. The tobacco leaves used to produce these cigars have been adversely affected by extreme weather conditions and disease outbreaks in the past few years. The quality and quantity of tobacco available have then been declining, which leads to the higher prices of raw materials necessary to make Cuban cigars.
• Stricter regulations: The Cuban cigar industry is facing stricter regulations conjured by the Cuban government itself. Cigar makers in the said country are facing more stringent regulations in terms of tobacco production and sales, which results in higher spending. They then pass the increased costs to consumers by raising the prices of Cuban cigars.

So, before they are offered here in Canada, Cuban cigars already boast high prices, turning them into luxurious items. However, the addition of taxes imposed by the federal and provincial governments further increases their cost, making them less accessible to a broader range of consumers.

Why Are Cohiba Cigars So Expensive?

One of the most prestigious brands in the tobacco industry today is Cohiba. Known for its cigar offerings, Cohiba has been serving demanding smokers with the finest products out there. To ensure the brand provides the best cigars in the market, it takes advantage of tobacco plants from San Juan y Martínez and San Luis in the Vuelta Abajo area of Pinar del Río region.

Another interesting thing about Cohiba cigars is they are all made entirely by hand. They likewise maximize two types of leaves, dry and light, as well as an additional fermentation process to give the tobacco products an unmistakable aroma and flavour. 

With numerous lines of cigar products in the market, Cohiba cigars remain the embodiment of pristine and class in the cigar world, allowing current and future cigar fans, lovers, and enthusiasts to continuously cherish them. 

While these cigars are loved by many cigar fans, their prices continue to increase lately. Cohiba cigars have become so expensive due to many reasons.

First, the supply of many luxury products has decreased significantly globally due to the recent health crisis, production disruptions, and climate disasters, affecting the tobacco industry as a whole. Additionally, the substantial demand during the pandemic as well as the influx of new cigar smokers have further compromised the supply chain. All these things have pushed the premium cigar prices to increase by a whopping 10 to 15%.

Another reason why Cohiba cigars are so expensive nowadays is the implementation of a new pricing strategy. In 2020, Hong Kong-based Allied Cigar Corp. took over half of Habanos, which is the distributor of Cohiba cigars. China also became the top importer of Cuban cigars in the same year. 

Consequently, in 2022, Habanos introduced and implemented a new pricing strategy to streamline prices globally. This resulted in major markets aligning the costs of selling Cohiba cigars across different countries. As a result, countries that frequently sell these cigars at low prices are now compelled to adjust their prices to match those in other countries.

As a result of these price hikes, non-Cuban cigars like New World Cigars and others are anticipated to gain popularity due to their lower prices. They might even fill the gap left by Cuban cigars, which are currently only accessible to the wealthiest individuals globally.

Why Are Davidoff Cigars So Expensive?

Another popular cigar brand in the world today is Davidoff. 

Davidoff is a Swiss premium brand that sells not only cigars but also cigarettes and smoker’s accessories. The brand has been owned by Imperial Brands after acquiring it in 2006. 

Cigars from this brand are produced and manufactured in the Dominican Republic and Honduras. The tobacco ingredients used to make the cigars are then sourced from the Dominican Republic, Nicaragua, Brazil, Peru, Mexico, Ecuador, Honduras and the United States of America.

Many users are enamoured with Davidoff Cigars because of their entire composition. The plants used in these cigars are meticulously grown in a greenhouse before being carefully transferred to the fields. They are then sorted for genetics and quality, draw-tested, and rolled by highly skilled cigar rollers who the cigar manufacturer can fully trust and rely on.

The complex and delicate nature of Davidoff Cigars makes them a highly reputable product that cigar enthusiasts and lovers should purchase at least once in their lives. However, their rising prices may deter some people from buying and trying them.

Some reasons why Davidoff Cigars are so expensive include the following:

• Premium craftsmanship: Davidoff Cigars are made from tobacco leaves that have been meticulously cultivated and handpicked to make sure they boast exceptional quality. They are then chosen based on their flavour, aroma, and texture, creating a distinctive blend that is only synonymous with the brand. The cigar-making process by Davidoff is likewise one of a kind, with skilled artisans working tirelessly to manually hand-roll each cigar, ensuring it provides a perfect draw and burn. The cigars are subsequently aged for several years so they develop their full flavour potential. All these things make the Davidoff Cigars cost more than others.
• Production and distribution costs: Now, since the production of Davidoff Cigars is limited, which means only a few of them are available in the market. And since they are processed delicately, it’s not surprising for the cigar brand to make their prices as high as possible to compensate for the intricacy involved in their whole production. From cultivating the tobacco leaves to aging the cigars for years, all come with a cost, which is then passed on to the consumers through the final selling prices. Even the distribution of these cigars contributes to their higher prices. Other costs that may be included in the final selling price are shipping, taxes, and markups.

Given the luxury status of Davidoff Cigars, alongside the additional costs incurred while distributing these products, it’s understandable why they have to be priced significantly higher than other cigars in the market today. As an alternative, you can opt for locally made cigars in Canada and enjoy the authenticity of these products in terms of the smoke quality they provide. 

You can browse through a wide array of cigars in Canada at NativeSmokes4Less. Buy cigars from us today so you can enjoy huge discounts and prompt delivery, wherever you are in Canada.

Frequently Asked Questions

What is so special about cigars?

Cigars are special because they are meticulously crafted with high-quality, whole-leaf tobacco, which offers a rich and complex flavour profile that many cigar enthusiasts savour slowly. Additionally, the craftsmanship involved in rolling a premium cigar by hand elevates its artisanal appeal, setting it apart from being just another smoking tobacco product.

Why are cigars for the rich?

Cigars are for the rich since these products are priced significantly higher than cigarettes and others in the tobacco market. These premium tobacco products have been hand-rolled using high-quality tobacco, which makes them expensive. They are then enjoyed by many rich people as they smoke them in private lounges, fine dining events, or celebrations.

What makes a cigar expensive?

The price of a cigar is heavily influenced by the intricate craftsmanship involved in its production. From the cultivation of tobacco leaves to the hand-rolling of cigar elements, each step requires a significant amount of time and effort. Additionally, the aging process demands extra space and costs. Furthermore, the reputation of the brand and the addition of taxes contribute to the high cigar prices.

Is a $20 cigar expensive?

A $20 cigar is reasonably priced and not considered excessively expensive, especially when considering the entire premium cigar market worldwide. This price range falls within the mid-range category, making it an ideal choice for cigar enthusiasts who prioritize quality and flavour.

Summary

Cigars have become expensive for the past few years for a couple of reasons. 

First, they are continuously being treated as luxury products that only a few individuals can afford to buy and use. Given the intricacy of their production processes, brands have the liberty to somehow keep the prices high. Second, taxes and other additional costs are added to the prices, further increasing their perceived value. Third, the changing dynamics brought by the recent health crisis and other global events have somehow shifted the demand for cigars, prompting cigar makers to raise the prices as they struggle to provide the needed supply by consumers.

Despite the high prices of these tobacco products, many still buy cigars in Canada today. To know why do people smoke cigars, check out this post at NativeSmokes4Less.