A Cigar a Day…
A good cigar is often compared to a fine wine. It’s a treasure that you like to share with loved ones and best friends. And its popularity is growing in Asia. But did you ever thought on this pleasure as source of money?
When you think about investment return these days, uncertainty is the answer, the one and only actually. Stocks are crazier then ever and good old property is no sure bet anymore. So, how about cigars?
Experts in the business say that it requires patience, but speak of an annual return of 20% over an average period of five years. One of them is Benson Tse, the manager of Cigarro Club, a hidden and tranquil gem for cigar lovers in bustling Hong Kong’s Central district.
“We are running this scheme of cigar investment for five years now, informally,” he tells me in one of the many rooms of this cigar retreat. “Now is becoming quite popular as you can see by our storage. The costumers first keep a lot of cigars for a long time, for example Cohibas from 2000. On that year they were selling for HK$6200 a box but now the price rose to HK$18000,” he reveals. Selling is not that difficult as the club as a good network of cigar lovers in the Mainland, Taiwan, Singapore and Malaysia, US and Britain.
No wonder that the walls of the club are filled with cupboards with boxes and humidors from all kinds and shapes. Many of the members are collectors and the place is ideal to relax in one of the many cozy and private rooms, alone or with friends, to have a business meeting in a more informal atmosphere or to have a lunch or dinner in the club’s restaurant.
“The price of cigars is going up because they are very limited in the market and now a lot of Hong Kong people go to China to teach mainlanders how to smoke cigars,” Benson explains. “That is why they like to collect cigars. It’s the same as in the wine industry. No one new how to keep and drink wine, but now it’s a very mature market,” he adds.
The club also has a shop where it sells at least 30 brands, that range from $HK100 per to $HK6000 per stake. It also specializes in limited editions, collectors’ treasures like a set of 50 boxes of Cohiba cigars signed by Fidel Castro, fetching a staggering $HK40 000 per box.
Cigarro opened in 2006, after having been a cigar store for five years, and the membership has been growing steadily. The club has now 500 members, 10% women and 20% coming from Macau.
The Casino Attraction
Mr. Tse says that his Macau members are casino owners and other businessmen. He doesn’t reveal names, but he remembers that when he had the store, Sand’s Sheldon Adelson visited the place when he was in town. “He only smokes one type of cigar called Montecristo Especial, it’s his favourite. He went two times to our shop,” Mr. Tse remembers.
With the increasing number of well-off clients of Macau, the Cigarro general manager has been visiting the territory regularly. He’s thinking on opening a club in the city, possibly in one casino. There’s nothing certain yet, but he believes it’s just a question of time.
“There is nothing like this in Macau, so it should be a good investment,’ he says.
But for now, he’s focusing in his immediate project: a cigar hotel due to open later this year also in Central. It will
have a huge storage place, bigger than the current club, which is clearly lacking space. He doesn’t fear the investment. The good thing of the cigar business is that one cigar aficionado always introduces at least one friend to the pleasures of a cigar.
Brief Guide for Beginners
So, which advice would Benson Tse give to a newcomer willing to discover this fascinating world?
First rule: cigar smoking is an acquired taste, so start light. “I would suggest a cigar not very strong for a beginner,” he explains, “a mild small cigar would be much better to start, because a strong cigar might put you off. I suggest the Famosos from the brand Vegas Robaina and also Hoyo de Monterrey which is honey flavoured.”
As for Benson, he like Cohibas, Partagas and El Rey del Mundo, which is not that famous, “but I love it because the taste is quite outstanding and unique,” he says. He jokes that he had to start working in the cigar industry to avoid paying for his expensive Cubanos. He’s been delighting himself with them for 15 years now. “It’s like the wine. Before you don’t like it, but then it grows on you. It’s like coffee as well. When you get to maturity, you’ll like it.”
Members pay an annual fee of HK$5000 which entitles them to 20% discount on cigars’ purchases. For more information go to www.cigarrohk.com.