Record Habanos Revenues, Shrinking Physical Supply, China’s Influence and the Unresolved Question of Who Controls Half of the World’s Most Famous Cigar Company
Text: Philip G. Wynne
There are few agricultural products in the world whose reputation is so inseparable from geography as Cuban tobacco. For generations, Vuelta Abajo has been the reference point against which premium cigar tobacco elsewhere has been measured. I have spent more than three decades working with tobacco and cigars in Honduras, Nicaragua, Costa Rica, the Dominican Republic and Ecuador, and throughout much of that period the industry lived with one commercial assumption: whatever our individual opinions of Cuban construction, consistency or value, Cuba occupied a category of its own.
That assumption is now being tested. The Cuban cigar industry is not simply collapsing, nor is it enjoying an uncomplicated renaissance. Cuba is attempting to rebuild its agricultural base while coping with shortages of electricity, fuel and agricultural inputs, aging infrastructure and constrained production. At the same time, Habanos S.A. has successfully repositioned its most prestigious cigars as global luxury goods, extracting dramatically more revenue from a restricted physical supply. Behind this transformation sits another remarkable development: China has become central not only to demand for Cuban cigars but also to the capital structure behind their international commercialization.
Start with the leaf, not the balance sheet
Anyone in the cigar business knows that discussions of revenue eventually have to return to the field. Premium tobacco cannot be manufactured merely because demand exists. Seed selection, soil preparation, transplanting, fertilizer, irrigation, harvesting, curing, fermentation, classification and aging all take place before a torcedor ever applies a wrapper leaf. Cuba planned roughly 20,000 hectares of tobacco nationally for the 2025–26 campaign, with Pinar del Río accounting for the great majority of the cigar-leaf program. The province is responsible for roughly 70 percent of the country’s tobacco leaf, yet weather, seedbed losses, drought and energy shortages prevented the original planting objective from being fully achieved. The recovery from Hurricane Ian continues, but planted hectares alone do not tell the cigar industry what it most needs to know: how much of the crop will become export-quality wrapper, binder and filler.
What is Cuba actually planting?
Modern Cuban production is not simply a continuation of the old Corojo and Criollo plants remembered from decades ago. Cuba’s registered black-tobacco cultivars include Corojo 99, Corojo 2012, Corojo 2020, Criollo 98, Criollo 2016, Criollo 2018, Criollo 2021, Habana 92 and Habana 2000, among others. Newer cultivars have been selected for yield and greater resistance to diseases such as blue mold, black shank and tobacco mosaic virus. Agronomic potential, however, should never be confused with usable premium-cigar yield. A hectare may produce substantial tobacco without producing the percentage of fine, elastic, evenly colored and undamaged capa required for the highest grades. For Cuba, wrapper quality remains one of the figures the industry should watch most closely.
Fertilizer, fuel and irrigation
The less glamorous side of the Cuban cigar story is the dependence of agriculture on imported inputs. Trade data show China, the European Union, Spain, Mexico, Colombia and other suppliers providing fertilizer to Cuba in recent years. In 2024 China was the largest fertilizer exporter to Cuba by value, while 2025 data showed a sharp increase in European supply. These figures describe national fertilizer imports rather than tobacco-specific deliveries, so they should not be presented as proof that a particular shipment reached a particular tobacco farm. They do, however, demonstrate the vulnerability of an agricultural system that requires foreign currency for fertilizer, fuel, irrigation equipment and other essential inputs. Tabacuba has also expanded photovoltaic irrigation systems in Pinar del Río in an effort to reduce growers’ exposure to blackouts and fuel shortages. For premium tobacco, where water stress at the wrong stage can alter leaf size, texture and quality, reliable irrigation is not a secondary consideration.
Habanos has made scarcity profitable
Against these agricultural difficulties stands an extraordinary commercial performance. Habanos reported record revenue of $827 million for 2024, an increase of about 16 percent from the previous year. China ranked first among its markets by sales value, followed by Spain, Switzerland, the United Kingdom and Germany. This result was achieved despite constrained physical availability of many Cuban cigars. The explanation is principally price. Beginning in 2022, Habanos pursued an aggressive repricing of Cohiba and Trinidad and increasingly treated its most prestigious products as international luxury goods rather than simply expensive premium cigars. A Cohiba Behike 52 that sold for roughly €55 in early 2022 was reported at around €230 by early 2026. Such an increase is not ordinary tobacco inflation; it is a deliberate repositioning of the brand.
China changed the economics of Cohiba
China made this strategy possible because it provided a market in which the prestige attached to Cohiba could sustain prices that would have been difficult to impose on many traditional European smokers. When physical supply is constrained, a producer can either attempt to increase volume or extract more revenue from every unit available. Habanos chose the latter course, and the $827 million revenue figure shows how successful that strategy has been in the short term. The risk is that a prestige-driven luxury consumer behaves differently from the habitual smoker who has purchased the same marca and vitola for decades. Economic weakness, tobacco regulation, gifting restrictions, anti-corruption campaigns or changing attitudes toward conspicuous consumption in China could affect a market on which Habanos has become unusually dependent.
The ownership question
The ownership structure behind Habanos has become almost as important as its market strategy. The Cuban state continues to own 50 percent of Habanos S.A. The other half was formerly associated with Imperial Brands, which exited its premium cigar interests in 2020. The private ownership chain that followed ultimately led through Allied Cigar-related entities to Chinese-born Cambodian businessman Chen Zhi, founder of Prince Group. Reporting indicates that Chen controlled 57.1 percent of the relevant Allied Cigar investment structure, giving him an indirect economic exposure equivalent to approximately 28.55 percent of Habanos as a whole. Other interests in the private structure have been associated in industry reporting with additional investors, including a Gulf-linked investment vehicle, although ultimate beneficial ownership should be described cautiously until fully documented.
After Chen Zhi’s arrest
The situation changed dramatically after U.S. and British authorities sanctioned Chen and Prince Group in October 2025 over allegations involving transnational fraud and forced labor, allegations denied by Chen and his organization. Chen subsequently entered Chinese custody in January 2026, while European sanctions followed later in the year. The important question for the cigar industry is not simply where Chen is, but who can exercise control over the assets through which his cigar investment was held. British Virgin Islands proceedings placed a number of Chen-linked companies, including an entity in the Habanos ownership chain, under provisional liquidation. Related proceedings and asset restraints in other jurisdictions have made any simple transfer of his interest difficult. The practical result is that Chen has not merely been replaced by another shareholder. His economic interest is caught inside a court-supervised and sanctions-sensitive structure while liquidators, courts and regulators determine what may ultimately be done with the assets. Habanos continues operating, but operational continuity should not be confused with a settled ownership structure.
The sanctions problem reaches the distribution network
A significant new development on September 4, 2026 shows that the Chen Zhi issue is no longer confined to ownership charts, court proceedings or abstract sanctions risk. Fifth Avenue Products Trading GmbH, Habanos’ exclusive distributor in Germany and one of the important links in its European distribution network, informed German retailers that it had temporarily restricted its business activities. The company said it could no longer accept new orders or ship goods because restrictions affecting its banking relationships had arisen during a compliance and sanctions review concerning one of its shareholders. The notice did not identify that shareholder. German corporate records cited in industry reporting indicate that Altabana, Habanos’ investment vehicle, owns 80 percent of Fifth Avenue, with the Villiger Group holding the remaining 20 percent. The significance is difficult to overstate: the uncertainty surrounding the private side of Habanos is now producing a visible commercial consequence at distributor level. A sanctions problem that begins with beneficial ownership can quickly become a banking problem, and a banking problem can become a supply problem for retailers even when the cigars themselves are sitting in inventory. Germany was Habanos’ fifth-largest market by sales value in 2024, so this is not a peripheral disruption. It is an early example of how unresolved ownership and sanctions exposure can travel through the Habanos distribution system and interfere with the ordinary movement of Cuban cigars to market.
The production gap is not remaining empty
Perhaps the most consequential change for Cuba is that reduced Cuban availability no longer leaves a vacuum in the premium cigar market. Nicaragua, the Dominican Republic and Honduras have developed the agricultural base, factories, skilled labor, fermentation capacity and inventories necessary to absorb demand that Cuba cannot satisfy. Costa Rica remains a much smaller producer, but it too has a long-established premium cigar tradition. In 2025 the United States imported roughly 430 million premium handmade cigars, with Nicaragua supplying about 258 million, the Dominican Republic approximately 94 million and Honduras roughly 75 million. This is an enormous premium industry that has developed without legal commercial Cuban cigar imports into the United States.
New World cigars are filling the gap
The significance extends beyond America. Nicaraguan, Dominican and Honduran manufacturers now have established distribution throughout Europe, Asia and the Middle East, placing them in many of the same markets served by Habanos. When Cuban allocations become difficult to obtain, or when the price of a familiar Habano rises beyond what a regular smoker considers reasonable, the consumer has alternatives. The New World does not need to reproduce Cuba exactly. Its commercial opportunity begins when a smoker discovers another cigar that provides sufficient complexity, construction and pleasure at a price he is willing to pay. Once that purchasing habit changes, scarcity can stop protecting the Cuban mystique and begin creating customers for Cuba’s competitors.
A transformed competitive landscape
Having worked with tobacco and cigars in Honduras, Nicaragua, Costa Rica, the Dominican Republic and Ecuador, I have watched this transformation develop over more than three decades. The New World industry today bears little resemblance to the industry that once lived almost entirely in Cuba’s shadow. Seed programs have become more sophisticated, fermentation better controlled, inventories larger and blending more international. Ecuador has become indispensable to the premium-wrapper trade, Nicaragua has moved from challenger to dominant supplier of handmade cigars to the American market, and the Dominican Republic possesses a manufacturing infrastructure of enormous scale and sophistication. Honduras remains a major producer with a long tobacco tradition and significant manufacturing capacity.
The real Cuban cigar paradox
Cuba therefore faces a more complicated challenge than simply producing more cigars. It possesses tobacco land that cannot be recreated, trademarks of extraordinary value and a mythology built over centuries, yet the commercial organization responsible for monetizing those assets has pursued a strategy increasingly dependent on high prices, restricted supply and Asian luxury demand while the agricultural system beneath it remains under pressure. Record revenue demonstrates that monetizing scarcity can work. It does not tell us how many habitual smokers have quietly moved to another cigar, nor whether they will return after becoming accustomed to a Nicaraguan, Dominican, Honduran or other New World alternative.
Where the industry should look next
The future of the Habano will be determined by more than what happens in a Habanos boardroom. The industry should watch the vegas of San Juan y Martínez and San Luis, access to fertilizer and fuel, irrigation reliability, planted acreage, curing capacity and, above all, the percentage of harvested tobacco capable of becoming first-quality capa. It should watch Chinese luxury demand and the pricing elasticity of Cohiba and Trinidad, while also following the legal disposition of Chen Zhi’s indirect interest in the private half of Habanos. These are no longer separate stories. Agriculture, luxury pricing, geopolitics, ownership and competition have become parts of the same cigar-industry equation.
For those of us who have spent our lives around tobacco, this is what makes the present moment so fascinating. The question is no longer whether Cuba can make an extraordinary cigar; it certainly can. The question is whether Cuba can produce enough extraordinary tobacco, with sufficient consistency and at a sustainable cost, to support the extraordinary prices Habanos now asks the world to pay. While Cuba works to answer that question, Nicaragua, the Dominican Republic, Honduras and, on a smaller scale, Costa Rica are already filling part of the production gap. The Habano remains one of the most powerful names in tobacco, but its future will depend as much upon what happens in the field and in the ownership structure as upon the enduring magic of the name Cuba.
