Max Gutmann is the owner of the exclusive Habanos S.A. distributor for Mexico, Importadora y Exportadora de Puros y Tabacos, S.A., (IEPT). Along with his long-time business partner, Rodolfo Velasco, he is a true pioneer in the cigar world, with significant accomplishments in his successful 35-year history with Cuban cigars. Cigar Journal sat down with them in the course of Habanos Day Mexico 2019, held at the Cuban Embassy in Mexico City on March 27, 2019.
Max, who also has Viennese roots on his mother’s side, can claim at least four important firsts in the cigar world: He was the first buyer of the first-ever auctioned box of Cuban cigars signed by Fidel Castro, well prior to the Festival del Habano gala dinners we are familiar with today; he and Rodolfo developed the first La Casa del Habano concept store, which opened in Cancún in 1990; in addition, Trinidad Fundadores, the classic Lancero, which used to be Fidel Castro’s personal cigar, was launched exclusively in Mexico by Max in the late 1990s. He also created the one and only regional brand for Cuban cigars, Edmundo Dantes, with three regional editions thus far (the Edmundo Dantes Conde 109, the Conde 54, and the Conde Belicoso), and perhaps more to come. Along with his team at IEPT, which now includes Rodolfo’s son Pablo, he runs a very successful business in Mexico, one of Habanos S.A.’s biggest and most important markets.
Max’s affair with Cuban cigars started almost 40 years ago, when he tried a Partagás Lusitania from his brother-in-law while visiting Europe. Needless to say, getting started with a double corona proved a challenge. A few days later, Max tried a Hoyo de Monterrey Epicure No. 2, and everything changed. He knew he was hooked for life. Once back home in Mexico, he wanted to start smoking Cuban cigars, but quickly found out that the only place he could find them, in very limited selections, was at the airport duty free shop. His friend Rodolfo Velasco, who frequently traveled to Cuba on business, offered to bring him back a box. On the next trip, this turned into three, then ten, then a whole suitcase with 20 boxes. By this time, Max had already built a rudimentary humidor in his house, but little did he know that it would grow into one of the most extensive collections in the world. Rodolfo then brought him the whole Cubatabaco catalogue, which made Max feel like a kid in a candy shop and sparked his idea of creating a small concept store where only Cuban cigars would be sold.
Max and Rodolfo worked with an architect friend who helped them develop the concept, brand, logo and the overall experience we know today. Max, who had never been to Cuba, asked Rodolfo to take the idea to Cubatabaco management on his next trip there. Negotiations lasted for almost three years before they could strike a deal with the company. Max’s original idea was to open the store in Mexico City, but Cubatabaco asked them to open it in Cancún, instead. Today, Max jokes that they didn’t want his new concept-store idea to be too far from Cuba so they could easily monitor what was happening.
He describes December 1, 1990, the opening of the first La Casa del Habano, as the proudest moment in his long and successful career in the cigar world.
Just eight months after the opening of La Casa del Habano in Cancún, Max was surprised to learn that there was a La Casa del Habano opening in Paris. He then got a call from Francisco Padrón, president of Cubatabaco, asking him to sign away all name rights to the Cubatabaco brand. He had two options: to ask for money, which he knew the Cubans didn’t have, or to simply refuse and kill his new-found passion and business. He decided to cede all rights to the name and brand to Cubatabaco and asked for only one thing in return. “Just remember who your first one was, and you never forget your first love,” he told them. Following this, Max was able to negotiate the exclusive distribution rights for Cuban cigars in Mexico, and IEPT was born.
Reminiscing about how his passion for collecting humidors started, Max told us that on one of his trips to Cuba in 1995, Cubatabaco organized their first dinner, with perhaps 200 guests. Cubatabaco officials said that a few boxes of cigars signed by the then-president, Fidel Castro, were to be auctioned off and they suggested he bid for one, because they didn’t know if the commander would ever do that again. Also interesting to note is that the concept of raising funds for the Cuban public health system was born during that dinner and with that first auction of autographed cigar boxes – long before the elaborate and magnificent humidors of the Festival del Habano we see today.
Max wanted to bid for the first box that came out. With a starting price of USD 600 (EUR 530), Max ended up paying USD 5,000 (EUR 4,450) for it, which was a lot of money at the time. As the second box went for USD 25,000 (EUR 22,250), he knew he’d made a good decision. It was a box of 25 Partagás 150 Aniversario, made only for that event. During the 2019 Festival del Habano, Max purchased the San Cristóbal de La Habana 500th anniversary humidor, which will now sit next to the very first San Cristóbal humidor ever auctioned, which he also bought 12 years ago. His personal collection now has ten humidors from the Festival del Habano, five of which are signed by Fidel Castro. His impressive cigar collection includes cigars dating back more than 100 years.
In Mexico today, approximately five million cigars are sold annually, with some competition from Mexican tobacco, which sells at much lower prices. As far as the growth and potential of an open US market goes, Max believes that a 40%-to-50% growth in Cuban cigar production will be a challenge under the present conditions. The pre- and post-industrial production capabilities in Cuba are one factor here, but also that only certain growing regions within Cuba are considered a “Denominación de Origen Protegida” (protected designation of origin certification) and increasing these means it may not be an easy task. However, he believes that Habanos S.A. is indeed thinking about this market potential and may be taking preliminary steps to eventually get into a position to serve that market directly. However, Max remains confident that the global market for Cuban cigars will largely be unaffected by a potential market opening in its northern neighboring country.
When asked about the percentage of Cuban cigars that are moving north, Max and Pablo say it’s difficult to estimate, but acknowledge that an important volume does end up in the US via individual buyers who regularly travel to Mexico’s largest tourist spots and are now able to take suitcases full of Cuban cigars and pay the required duties, which makes it a completely legal practice. Pablo says that the US market is already being served laterally by distributors in Mexico, the Caribbean, and Canada. A potential opening of the market, therefore, will not have a significant impact on the demand for Cuban cigars worldwide.
With regard to the widely discussed issues of the quality and quantity of Cuban cigars for Habanos S.A., Max is very clear that there has never been any discrimination when it comes to the products (brands) that reach each market, even if rumors abound that certain markets get better quality and better brands from Habanos S.A. He notes that, from the largest distributor to the smallest, they all have to fight for the same limited production quantities. Access to the premium global brands like Behike and Cohiba, he says, is difficult, and distributors seldom get the quantities they order. However, this is an issue suffered equally by all and no distributor can claim access to better quality cigars. Obviously, a larger market, like Spain, receives a comparatively larger selection than a smaller market, such as Panama. But a box that has ended up in Geneva or London may well have ended up in Bogotá.
When it comes to quality control issues with Cuban cigars, Max and Pablo both say that issues have existed in the past, but they agree that in the past few years, there has been an increase in quality. Probably due to the shift in focus from quantity to quality on behalf of the manufacturer Tabacuba and marketer Habanos S.A., which has resulted in a noticeable increase in overall quality over the past five years.
The fight against fake Cuban cigars is ongoing and is a serious problem. However, Pablo says that they have recently turned their strategy from attacking the fake market from a legal, regulatory, fiscal and sanitary angle to focusing on supporting and educating their distribution network and final consumers. This new strategy is yielding better results and avoids the prolonged and expensive legal battles of the past. The fake market, like a Hydra snake, is impossible to kill; when you cut one head, additional heads grow, making it virtually impossible to defeat.
IEPT has incorporated technology in the form of QR certificates that can be easily verified at point of sale. As with any market, the best way to avoid fakes is to only purchase Cuban cigars at an authorized and certified distributor. Pablo classifies the buyers of fake cigars into three different categories: those who buy one box every couple of years as a tourist, perhaps as a gift; the smoker who knows he or she is buying a box of fakes; and those who are genuinely fooled into buying fakes. The buyer who knowingly and willingly buys fake Cuba cigars is irrelevant to them; however, Max hates to see the buyer being fooled into buying a horrible quality product, which may eventually end up driving a potential customer away from the real product. Ultimately, having a certified point of sale, is the most important factor in avoiding fakes, and their focus on educating customers and those involved in the distribution network is the best way to address this issue.
On the subject of non-Cuban cigars, Max readily admits that his passion is only for Cubans; he only smokes Cuban cigars. Occasionally, he will smoke a non-Cuban that has been gifted to him, but he remains loyal and faithful to his Cuban cigars. Pablo highlights another interesting point, which is that they favor and welcome market growth in non-Cuban cigars, not seeing it as direct competition but as a gateway to the ultimate goal of becoming a Cuban cigar smoker. Given the higher price range of Cuban cigars, they envision a smoker who starts smoking lower-priced non-Cubans as a future client, who will ultimately graduate to Cuban cigars once his or her taste and wallet has evolved to a level where they will capture that client for life.
Moving on to the now famous and Mexico-exclusive brand, the Edmundo Dantes, Max told us the concept originated with the old Partagás 109 vitola, which had a conical head, something not very common nowadays. The elusive, and difficult-to-make vitola, was last produced in 1995 as part of the celebratory cigars used in the 150th anniversary of the Partagás brand.
Max wanted to replicate the shape with his new, regional Mexican edition. He also demystified the rumors that the Edmundo Dantes brand had anything to do with any trademark issues with Montecristo in Mexico and was only an allegory to the hero of the Alexandre Dumas novel. Furthermore, the blend used for the Dantes has nothing to do with the Montecristo blend. Max is surprised by the way the regional editions market has grown among both collectors and smokers worldwide. It’s safe to say that we will see more of Edmundo Dantes in the future. So far, Mexican regional editions have been the Edmundo Dantes line with the Conde 109, the Conde 54, the Conde Belicoso. The last regional edition was the Punch Duke 2018, officially launched during Habanos Day Mexico 2019.
The conversation turned to the Trinidad Fundadores, a very elegant vitola which is now making a comeback with discerning smokers around the world due to its history and tradition. Likely unknown to most Cuban cigar smokers, the Trinidad brand also has a connection to Mexico. Max tells the story of how it was Fidel Castro’s personal reserve and used as official gifts, and rarely seen otherwise. Back in the mid-Nineties, Max tried to convince the then-president of Cubatabaco, Francisco Linares, to make the brand part of the portfolio; his efforts paid off when they agreed to make 2,000 boxes of Fundadores in 1998, which were exclusively sold in Mexico. Says Max, Mexico was probably chosen because it was Castro’s idea of putting the Fundadores right next door to the United States, knowing they would surely end up there. It was Castro’s way of sending a message to the U.S. administration. Needless to say, the Fundadores were a great success and turned Trinidad into a sought-after brand throughout the world.
We wish Max and IEPT success and can’t wait to see what other “first” Max will surprise us with in the near future.
Photo credits: Emilio Alcocer Martinez. Instagram: @emilio_alcocer. Web: www.digitalab.mx