Why Spend $2,000 on a Cigar?

The venue was the outdoor cigar terrace at Boisdale’s Restaurant in London’s Belgravia district. The event was the third auction of aged and vintage cigars organised by C.Gars Ltd. The month was November 2010.

For the privilege of enjoying a cigar whilst bidding, the assembled company of the world’s cigar traders and collectors had to endure a temperature that never rose above 2° Celsius. Coats, scarves and hats were the appropriate attire for the well-prepared, whilst those with less foresight had to rely on the warming properties of one of over a hundred whiskies, blends and malts, for which Boisdale is renowned. Bidding was brisk, if only to hasten the end of the proceedings and a return to indoor warmth.

Then Lot 110 came up. It was a box of rare, pre-embargo Romeo y Julieta Dunhill Seleccion 779, a large cigar measuring 7½ inches (192 mms) in length by 48 ring gauge, but it contained only ten of them. The estimate stood at £2,000 to £2,500 (around $3,000 to $3,750), which was a reasonable price even if it meant paying a few hundred quid per cigar, and nobody doubted that it would sell quickly. It didn’t.

Photo: Habanos S.A.

Several bidders showed interest at the start and the estimate was soon passed. But the bidding kept going up. By the time it reached twice the estimate (£5,000, or $7,500), just two people remained in the game. Both were collectors, one from Hong Kong and the other from Japan.

By chance, they were positioned at either end of the terrace, so as the bids soared, the audience’s heads turned first one way then the other as if they were watching a match on the Centre Court at Wimbledon. When £10,000 was reached (£1,000 per cigar), a cheer went up as if one of the players had served an ace to save the match.

The final bids came slowly as each man weighed up the other to try to guess how far he would go. The hammer came down at £11,500, which after the commission and the VAT that is charged on it, meant that the gentleman from Japan, who won the bout, had paid just over £13,000, nearly $20,000, for his ten cigars. To the best of my knowledge this tussle set a new world record for the highest price paid per cigar – £1,300 or $2,000 – at public auction that still stands today.

Part of what drives prices like this is the thrill of the auction. When two or more collectors are pursuing the same prize things always get exciting. But why would anyone be prepared to spend this much money on a cigar, particularly when it is over 50 years old? Is there any way that such extravagance could be justified?

The simplest justification would be if Havana cigars could be relied upon as a safe investment, but they cannot. Titanic battles such as the one described are rare and would not happen again to the same box any more than lightening might strike twice in the same place.

Photo: Habanos S.A.

However there is something about Cuban tobacco and the way it is fermented that puts it alongside the produce of the finest vineyards of Burgundy or Bordeaux when it comes to the effects that ageing can have on improving taste. Fermentation lies at the heart of the process that improves the taste of Havana cigars.

Although the role of fermentation is well understood in the processing of grapes into wines or spirits, the term is seldom associated with tobacco. This is because most tobaccos, such as the types you find in cigarettes, are not fermented at all. After an accelerated process at high temperatures known as flue curing, they become stable products ready to be used in manufacture.

By contrast, Cuban Black Tobacco is subject to a much longer, gentler aircuring process. This is followed by a series of quite radical fermentations, with water acting as the catalyst, which invokes oxidation reducing the nicotine content in the leaves, eliminating soluble carbohydrates and through the deamination of nitrogen compounds releasing copious volumes of ammonia.

At the same time the pH of the leaves becomes more alkaline. Non-scientists, like me, will be relieved to hear that even the tobacco industry’s standard reference work, the Voges Tobacco Encyclopedia, upon which I relied for the previous paragraph, states that “The process is very complex and still understood incompletely.”

Tobacco processing in Cuba, from the point when the leaf is picked to the moment when a finished cigar is banded and put in its box, is designed to ferment out all impurities. It does so to a very great extent, but vestiges of fermentable constituents remain, which will allow ageing gradually to influence the taste.

Min Ron Nee’s invaluable work greatly enhanced the knowledge of ageing cigars a decade ago. A second edition is eagerly awaited.

Our understanding of how Havana cigars benefit from ageing has been greatly enhanced over the last decade by a gentleman from Hong Kong, named Min Ron Nee, who, in 2003, published his invaluable An Illustrated Encyclopaedia of Post-Revolution Havana Cigars. Mr. Nee considers that the existence of a cigar falls into four stages. He starts with the Sick Period, followed by the First Maturation, the Second Maturation and the Third Maturation. There is no substitute for buying a copy of Mr. Nee’s volume should you wish to share the full extent of his wisdom, but let me try to extract some of the key points he associates with each stage.

The Sick Period, which can last between one and two years after manufacture, is characterised by emissions of ammonia still present after the last fermentation. There is a consensus building that the Sick Period is identified less frequently these days but when it does emerge, the cigars should be left quietly to recover and not be smoked.

The First Maturation, which is when the cigar is at its “most flavoursome”, occurs, he states, at different times according to the strength of the brand in question. With light-flavoured brands like El Rey del Mundo or Rafæl Gonzalez, it can take place after two-to-three years, with medium-flavoured brands like Romeo y Julieta, after five-to-six years, and with full-bodied cigars like Partagás or Bolívar, after as long as ten-to-fifteen years.

Photo: Hunters & Frankau Limited

Considerable patience is required for your cigar to reach the Second Maturation because Mr. Nee reckons it will take fifteen-to-twenty years for most cigars, and some will never make it. The reward is a reduction in the taste of tannins resulting in a very smooth, mellow, complex and classy flavour.

The ultimate Third Maturation, Mr. Nee continues, is all about bouquet, something that also occurs in the greatest wines when they are left to age for 20 years or more. It happens rarely with cigars but, when it does, the best word Mr. Nee can find to describe the experience is “ethereal”.

Collectors of Havana cigars are currently in a state of great excitement because Mr. Nee is rumoured to be about to publish a second edition of his tome. Much more lavishly illustrated than the first edition and much larger (the first was nearly 500 pages) because it will contain not only more examples of cigars from the 1960s, 1970s and 1980s, but also all the new standard and limited edition Havanas that have been born over the last ten years.

It will be a handbook for collectors, there to guide novices and experts alike. However it will always lack one bit of information about the cigars it lists: how much is it worth?

The advice I would give anyone planning to become a collector is to repeat what the jubilant seller of the box of pre-embargo Romeo y Julieta Dunhill Seleccion 779 said to me on the night they sold.

When I asked the man, who happens to be a friend of mine, why he bought the cigars in the first place, he said: “Simon, I just loved the look of them”.

This article was published in the Cigar Journal Winter Edition 2013. Read more