There have been many press releases this week regarding cigar manufacturers, retailers and the PCA (formerly IPCPR). These releases concern the annual PCA tradeshow. I have put them together in one post for you to read.

Here is the press release that started it all:

LEADING PREMIUM CIGAR MANUFACTURERS NOT ATTENDING 2020 PCA TRADE SHOW

Thursday, January 9, 2020 — Today, leading premium cigar manufacturers Altadis USA, Davidoff of Geneva USA, Drew Estate, and General Cigar / STG, are announcing that they will not attend the 2020 PCA trade show. This decision, which each of our companies reached unilaterally after careful consideration, reflects our strong belief that structural change in the trade show is in the long-term best interests of the entire premium cigar industry and its customers.

Over recent years, an increasing number of retailers and manufacturers have come to recognize an unfortunate set of facts:

• Our most important industry gathering – the PCA trade show – has been in decline.
• Attempts to discuss ways to reverse the downward trends in relevance, attendance, membership, and category growth have been met with silence.
• The cost of the event – which continues to rise – has consumed funds that could otherwise be used to defend our industry from regulatory and legislative attacks, which threaten the livelihood of each and every one of us.

After six months of repeated outreach to PCA, various efforts to discuss ways to enhance the structure, organization, and value of the show – for the benefit of retailers, manufacturers, distributors, and consumers – were unsuccessful.  Absent significant improvements, the trade show will continue its downwards spiral.  As “customers” of the trade show, it has become increasingly evident to each of us that we simply cannot continue to support and underwrite an event that is not satisfactorily responding to, or meeting, the needs of our industry.

Looking ahead to 2020, each of us is individually committed to using resources previously devoted to the show and repurpose these funds towards achieving two important goals for our industry.  One, to enhance the best-in-class trade programs and product offerings that continue to fuel the success of our retail partners. Two, to continue being at the forefront in the fight to protect the interests of the entire premium cigar industry against the imposition of unreasonable burdens that restrict our industry’s ability to market and sell our products to adult consumers.

We recognize that some may mischaracterize our decision, distort the truth, or misrepresent facts.  Let each of us be clear. Our commitment to our industry and to our retail partners has never been stronger.  Our sole motivation is to seek pathways that are more valuable for the entire premium cigar industry. 

Lastly, we each remain committed to engaging in transparent and honest dialogue with any and all industry partners about how best to reinvigorate our trade show, as well as to preserve and protect the interests of the entire premium cigar industry.  The betterment, advancement, and ongoing success of our industry has been – and remains – our only motivation and goal.

The PCA then responded with their own PR:

As you may have heard from today’s press releases, four companies announced they will not exhibit at PCA 2020. We want to assure you that the world’s biggest premium cigar and pipe show is on with over 110,000 square feet of space booked by hundreds of family-owned companies. The four companies not attending represent 12% of show space and, since the announcement, many exhibitors have reached out to PCA to secure booth space, potentially expand their footprint, or relocate to the vacated space.
The PCA 2020 show will be full, with the family-owned manufacturers who support the brick and mortar retailers and whose products fill our humidors. It is more important than ever that family-owned businesses that built this industry come together. This year, PCA 2020 will have some exciting new features to showcase new products and help retailers and exhibitors create and enhance relationships. We will be rolling out new information in the coming weeks and months on those developments.
The PCA trade show remains not only the most important business event in the premium cigar and pipe industry, but also our greatest asset in fighting back regulations on both state and federal levels. Your membership and attendance at the PCA trade show directly finances the industry’s legal challenges against the FDA. To date, along with our partners at Cigar Rights of America, we have spent a combined $4.5 million just on litigation against FDA regulatory oversight, not to mention the millions we spend every year on our legislative agenda. These efforts have benefited the entire industry.
Our biggest priority remains focused on keeping a pathway for new products to come to market. After years of fighting, we are making some incredible new head ways in achieving major regulatory relief for the industry. For any member who would like to get more involved in the PCA and in serving on a committee, please contact PCA Executive Director, Scott Pearce.
We thank you for your continued support and look forward to seeing you in Las Vegas this July at PCA 2020.
All the best,
PCA Board of Directors

Several other manufacturers have since released their own views:

PRESS RELEASE

January 14, 2020 —Oveja Negra Brands (ONB) announces its participation in the upcoming TPE Tradeshow and PCA Tradeshow, both held in Las Vegas.ONB consists of Black Label Trading Company, Black Works Studio, Emilio Cigars, and Dissident.

This is the first year Oveja Negra Brands will feature its premium cigar group at TPE in booth #1053.“We look forward to participating in this year’s TPE Tradeshow.  We have noticed the effort the organizers have put into bringing the premium cigar category to the forefront of this expo and we look forward to participating,” said Benjamin Holt of Dissident.

Oveja Negra Brands will also have a booth at the 88 Annual PCA Tradeshow scheduled for later this summer.  “We will continue to showcase our brands at this historical tradeshow.  It is our opportunity to spend quality time with our current retailers and meet prospective retailers.  We are looking forward to continued growth in the industry, and PCA helps facilitate that growth. Each year we release a cigar exclusively for PCA attendees as a way of showing our appreciation for the retailers who come to support our brands and the show. The details of the 2020 PCA Release will be announced soon,” said James Brown, Director of Black Label Trading Co. and Fabrica Oveja Negra.

Here is a press release from Famous Smoke, a large online presence:

Famous Smoke Shop Withdraws from 2020 PCA Trade Show

An Open Letter to the Premium Cigar Industry

I want the industry to know why you will not be seeing me or my company at this year’s trade show.

This is not a decision that’s been made lightly or quickly, as I have wrestled with this idea for quite some time. My first trade show goes way back to 1970, when it was held in NYC in the Statler Hilton Hotel on 7th Avenue. For those of you who still remember, the “show” was held in small rooms or suites. The individual deals and negotiating were done in the
bedroom – I kid you not. Many of the vendors I once knew are now out of business or dead, so it is with fondness and sadness that I look back to those days prior to the Cigar Boom. As a side note, I sat down at the 1991 show with Marvin Shanken. It was the only time I ever got anything from that man…lunch was on him. The magazine had not yet been published, and he wanted a donation: my mailing list. I won’t go into the details of the negotiation, but he did not get it. I have only spoken to Marvin since that time on two more occasions. Both were equally unpleasant.

I have watched how our industry’s trade show has evolved over the last 50 years. I have paid my dues every year and cannot calculate how much money I have spent going to the shows and supporting the RTDA/IPCPR/PCA. However – not once in those 50 years has anyone from the trade organization ever returned the support or taken time to understand my business, or this segment of the retail market.

Instead, I – and other members of this group – are treated as pariahs by the very same organization we have tirelessly supported. Because according to the PCA, we internet retailers are the enemy. We are the cause of declining sales at B&M’s. Not the fact that a fair share of retailers choose to remain complacent, relying on last century’s technology and
the deeper pockets of others to fight their battles for them. No, it’s our fault: catalog and internet-managed companies are destroying the industry, preying on “the little guy.” Oh, if only if we would disappear – then money would rain down like manna.

This logic would be funny, if it weren’t so misinformed. Or dare I say, ignorant. My company has maintained a B&M store for every day we’ve been in business – over 80 years and counting, and well before that terminology even existed. I struggled with excise taxes in New York State back before the Cigar Boom started, and you could still enjoy a cigar on an
airline flight. NYC was a tough place and J&R cigars was only 5 blocks away. Yes, we competed – hard.

But I saw way back what was needed to survive. There were only a few of us around: Thompson Cigar (which has since been acquired), JR Cigars (acquired), Holt’s (partially acquired), Mike’s Cigars (private), and Famous Smoke Shop (private).
Cigars International was not even an embryo. All of us knew one thing for sure: we needed to make the country our marketplace. In various ways we were all successful in our endeavors. We survived pre-Internet days, then we adapted again to new digital technology. The road was difficult and expensive. New technology requires new personnel and significant
investments, and some of us are still in the process of adapting to the new environment.

I, and other members of our small circle, have been very active in support of various efforts to reduce or eliminate cigar taxation and regulation. Not once, in the 50 years that I have been in this business, have I in any way encouraged any entity to increase regulation or taxation on my B&M brethren. Not once have I ever pursued a cause that would hurt any
part of this industry which I have loved. I have fought against all forms of tobacco regulation and taxation, whether it affected me or not. I have contributed money and time to the CRA, CAA, and PCA.

But no longer. I cannot continue to support the PCA, an organization so far out of touch with the reality of the current market. I am tired of supporting those who seek to damage my business to increase their own. Recently this all came to light when I learned that the PCA spent time and money to increase taxes on cigars. Yes! Under the banner of a “level playing field”, the PCA lobbied to increase taxes, but only on remote sellers like me. So here you have a hypocritical organization,which is out to hurt and/or destroy a part of the industry. Why? We are not your enemy. Your business will not be better if we disappear. Prices will skyrocket and few will be able to afford $12-$20 cigars.

I want the industry to know why I made this decision. I want my suppliers to know why I will not be visiting with them in Las Vegas for the first time in 50 years: the PCA’s course of action is not acceptable, and encourage my suppliers to contact the Board of the PCA to let them know that. I write this in the hope that other organizations will also decide not to attend the 2020 PCA show. I have often used the “Titanic” metaphor: we are all on the Titanic fighting for higher berths. Yeah, a house divided and all that stuff. I will reward those vendors who support my company, both Internet/Catalog and B&M. The names I mentioned are not the problem – organizations like the PCA are the problem, too busy fighting for higher berths. I had the foresight to leave New York State and move to Pennsylvania, where I have joined with my competitors to battle issues that are more important than my petty dislikes. I wish that were true of the retailer segment. I survived because I was smart and persistent. I will continue to survive and prosper without spending all that time and money attending PCA in 2020.

My decision to quit the show was made before I heard their news, but I applaud the decision of Drew Estate, Altadis, General Cigar, Davidoff and Villiger to withdraw from the show; while they have their own reasons, it’s clear these companies have come to the same conclusion about the PCA that I have. I suggest some of you reading this do the same.

Arthur Zaretsky
Famous Smoke Shop President/CEO

Finally, Abe Dababneh owner of the Smoke Inn chain of cigar shops offered his opinion as a retailer on his website:

An open letter to the cigar community

As Abe said, the consumer is the bottom line of the cigar industry. If not for us, who are the retailers selling to?, why are cigars even being made?

What is our power and how do we use it? If we were to educate ourselves on both sides of the issue, do we choose a side using our purchasing power to support a brand that is pro PCA or anti PCA based on our own opinion? Is that even helpful? What would that prove?

So much food for thought. What do you think? Let me know in the comments below.