This article was written by Daniel Temos (Dalamscius) and is the first installment of a two-part series. Be sure to back next week when the final portion of this article is available.
It’s a Friday night, you head out to your local B&M (Bricks and Mortar) Cigar shop with plans to hang out with some of the folk there and enjoy a good cigar. You pick up a well-priced $6 or $7 Nicaraguan cigar from one of the local boutique manufacturers, sit down on a couch in the lounge and order up a fine glass of Scotch (neat of course!). You’ve done this on a regular basis and it’s become an enjoyable vacation from the everyday life. Now how would you feel if that changed for the worse? This is the first section of a two-part article discussing how your Friday night could change.
My name is Daniel Temos, (Dalamscius). I live in Toronto, Canada and have been enjoying cigars since 2005. My passion for cigars was sparked during one of my yearly fishing trips to the pristine lakes of northern Ontario. A friend of mine brought some cigars which we all split, smoked, and enjoyed. As many of you know, the laws regarding Tobacco and smoking in Canada are quite different from those in the USA. Although most of my cigar orders come from shops in the US or from vacations, I do spend some time at my local shops. My time at cigar shops nearby is usually spent purchasing cigar accessories or the not so often sampler of 1 or 2 cigars. On a recent trip to Florida, I spent a fair amount of time at a local shop and learned how different the culture is in the USA compared to Canada. Let’s delve into the world I live in and see how long you would continue to support your local B&M if…
Tobacco Taxes and Duties Drastically Increased.
Just like the USA has different tax rates in each state, Canada has different rates in each province. On top of the provincial rates there are also federal duties that Canada imposes. For the purpose of examples, this article will be using Canadian rates from Ontario.
Without getting into the intimate details of every duty and tax we will simply use a generic example and estimated duties and taxes. Let’s start from the manufacturer and go all the way through to the consumer.
- Manufacturer Cost: $5.00
- Duties + taxes + profit margin: $3.00 + $4.00 + $1.50
- Importer Cost: $13.50
- Taxes + profit margin: $3.00 + $0.50
- Retailer Cost: $17.00
- Taxes + profit margin: $2.00 + $1.00
- Consumer Cost: $20.00
Keep in mind these are approximate and quite lenient, but it gives you an idea of how much prices get increased throughout the supply chain. Now lets translate this into how it will effect the customer at a local B&M.
If you went to your local B&M on our hypothetical Friday night you would typically spend about $6.00 on a decent cigar, lets say a CAO La Traviata. That same cigar in Canada would cost you around $20-$25. Is it worth it now? What happened to your Friday night now if you wanted to light up 3 or 4 cigars? It just got a lot more expensive!
Selection at Your Local B&M Slowly Dwindles Away.
These expensive prices not only have an effect on consumers, but it also causes some ill effects on the manufacturers and importers. The direct result of this is that they sometimes feel it’s not worth bringing in certain cigars. So now your Friday night has gone from expensive to expensive with a very limited selection. Things are slowly going downhill!
Your local B&M will also feel the sting as you start to hold your wallet a little tighter and look for other sources for your cigars. The first most logical step would be to search other states. Unfortunately, borrowing from the laws in Ontario, shipping cigars across state lines is now illegal. Actually, you are not allowed to put any tobacco products in the mail at all. So now you start seeking online shops in foreign countries. Yet another roadblock gets in your way, all your shipped cigars will be susceptible to the same duties and taxes as mentioned above. Marking them as a gift won’t help you either, tobacco products are excluded from this list. The best local solution is to seek out a shop that is located in a duty-free zone within your own province/state. These are few and far between. I only know of two in my province. These shops are still taxed but not to the same extent so you get a slight discount. That same CAO La Traviata will still cost you about $15. So now, as with most Canadians, the main source of cigars comes from vacations or vacationing friends since they are the best value.
Local B&M’s Start Disappearing.
So after all that, are you still willing to buy from your local B&M? I’m sure some of you still would but probably not as frequently as you used to. So what happens to all those B&M’s since they start losing all your hard earned dollars? Well, just like any other business that loses money they will slowly start disappearing. This will require you to start driving even further to get to your nearest B&M. The nearest B&M with a decent selection to me is about a 1 hour drive, and the one after that is another 2 hours away. Not exactly convenient.
Now, as Walt once said to me, the world is beginning to crumble. Let’s bring a little bit of light into this darkness. Would you still support your nearest B&M after all this if…
The Embargo Was Lifted But Cuban Cigars Were Very Expensive.
So this point is a bit of a double edged sword. Taking into account everything that we discussed so far, let’s remove the embargo and bring Cuban cigars to your local B&M. Now would you go support them? I’m guessing I might win a few people back here but not too many considering what the prices will be. The B&M’s will still be suffering from other ill effects and although they have access to Cuban’s they will likely only carry a very slim selection.
Now we’ve gone through a variety of changes that will no doubt give you a different perspective next time you walk into your favorite B&M on a Friday night. I’m sure a lot of people would still visit the B&M’s and mostly bring their own cigars. This will still make a fun Friday night enjoying a cigar and a drink with friends in the comfort of their wonderful lounge. These are still just a portion of the proverbial iceberg that we have touched upon. Part 2 of this article will talk about a few more aspects that could impact your Friday night. The downward slope isn’t over yet…
Daniel Temos (a.k.a. Dalamscius) writes articles and cigar reviews with Tony Casas on www.casasfumando.com. Be sure to check out the site. He is an IT Professional from Toronto, Ontario, Canada and enjoys cigars, scuba diving, hockey, fishing, nature and anything that challenges his mind. If Daniel’s not sitting on his big comfy couch or at work you can usually find him in a boat on top of the water or 100ft under the water enjoying a dive. He is engaged to a wonderful Fiance and looking forward to his wedding. Feel free to contact Daniel anytime via email (dalamscius[at]gmail[dot]com). And make sure to follow him on twitter http://twitter.com/Dalamscius
24 thoughts on “A Comparison between Canadian and American Cigar Shops – Part 1”
Great article. I’m looking forward to Part 2.
Curious how much of 1-2hr ride to B&M is addiction vs. hobby support ? I’m very blessed to have ~10 decent B&M shops within the state. Most of them are fairly close to my house or my job. I can’t imagine driving for 1-2 hours and paying $20 for 1 cigar. As much as I respect and support B&M shops, my family and its budget is more important. I would definitely be looking for other alternatives.
THE UNITED STATES OF AMERICAN CIGAR OUTLET STORES ARE: CIGAR INTERNATIONAL.COM, CIGAR.COM, FAMOUS-SMOKE.COM, JRCIGARS.COM They are 50% to 75% cheaper than you B&M cigars.
Canadians cannot order from 2 of the 4. CI and Cigars.com will not ship to us.
Also ordering from Famous-Smoke is made into a huge hassle as orders have to be placed over the phone.
I have no comment on JRCigars, other than willing to bet they won’t ship to Northern neighbours.
I also live in Toronto and the prices of cigars here are ridiculous. I have thankfully found a cigar shop in the States that will ship to me discreetly to avoid those high taxes and duty charges. I just had me a very nice Don Pepin the other night. Cost me about 5$. Here probably 20$-25$ if I could even get it here. What a joke!
Can you discreetly email me your contact? I’m sick and tired of being screwed over for the price of a cigar.
Hi! DonJohn could you discreetly email me your States cigar contact? After some research I found the prices are just nuts.
Could you also discrretly email me your states cigar contact?
Gee, T-Cigar…nice reinforcing the steady decline of the local shop. Daniel’s entire argument is that the LACK of B & M will eventually lead to NO selection other than your all caps monoliths you listed. He also mentioned it was illegal to ship tobacco to Canada.
Jay – ya, the drive to the leas expensive shops is a little crazy but it’s worth the prices. To put a real life example into perspective here. My brother bought me a box of RyJ Coronitas on vacation he paid about $70 for the box so just under $3 per stick. That same cigar is $17.99 at my local shop, saw it this weekend…
I love to support any local company but it’s hard. I do my duty at herfs but usually only 3 or 4 per month, it’s hard for me to justify anything more.
Grumpy, it’s funny how the online stores he mentioned don’t even ship to Canada. lol. I know what you mean about supporting the locals but you have to admit, it’s hard not to look elsewhere and that makes me worry about what could happen here…
Agreed. I live in Vancouver and either pay ridiculous prices at my local b&m or have them sent to friends in seattle who routinely come up to Vancouver. And regardless of the fact that they are available, most Cubans are completely out of my price range.
Another real life example: I just purchased a box of 20 AB Trilogy maduro torpedos for $60 from an online retailer in the states and had them sent to a friend in Seattle. They’re on their way up. Buying that same cigar at my local b&m would cost me $18.99 per stick. I just checked yesterday.
the canadian and us dollars are at par. no conversion needed.
Another real life story. I was in Chicago the other week and had a chance to go to Tesa Cigar. It’s BYOB, you buy a cigar, sit down and enjoy whatever beverage you decided to bring. How refreshing!
Very interesting and inciteful article. Really gives some perspective.
I wasn’t aware of the reasons behind our high prices. I’m in Alberta, Canada, and pay probably a bit less than most Canadians who shop at B&Ms (assuming this ’cause there’s no PST, Provincial Sales Tax, in AB, and because Vancouver B&M prices for similar cigars were a bit higher), and until now just knew we paid way more. I previously thought it was mainly due to taxes on tobacco.
Most customers at the tobacconist’s I frequent most likely make a lot of money, based on, for example, the abundance of BMWs parked around the shop, or are like me and don’t by that many cigars. In my case, I buy and smoke ~4 a week, which is still pricey for me.
I didn’t know that taxes/import duties still apply to cigars bought online. That sucks. If I every get a temperature-controlled home and can then by a humi (or instead pop for a wine-cooler), it sounds like ordering online won’t help me much.
Guess if you’re Canadian, you’ve either got to be rich, have to smoke less, or, umm, have to be willing to bend certain rules. Crap.
Well, not good news, but Part 1 was an eye-opener. Hopefully Part 2 has a more hopeful ending.
Re: Stefan Alberta has some of the highest taxes on tobacco
in all of Canada. They throw out some flat taxes depending on the
size of the cigar that can be as much as $7 tax on any cigar over 4
1/2 inches in addition to all the other fees. Honestly, ordering
from online sources is the only way to save money in cases like
this but it’s very hard to get cigar stores from the US to
discreetly ship to Canada. I bought a box of Rocky Patel Sun Grown
for about $5.20 a stick, in my B&M theyre $27…. I’ve been
doing it for years already and spent probably a couple thousands on
cigars this way but saved maybe 3-4 times that if I had bought the
equivalent amount here. I would never be able to afford that. I do
support B&M stores by buying a single cigar every other
month to try a new cigar without having to go through extensive
lists online without getting to touch or smell it.
I think T-Cigars answer was a bit harsh but I do agree in a way. I’ve been an avid cigar smoker for about 10 years now, and I honestly have only smoked at a B&M about 5 times total. There is a local cigar tasting that I go to frequently because of the deals but I purchase most of my cigars online.
I know that me complaining about the $5-$10 prices is kind of ridiculous given the fact that others are paying $20.00 or more per stick, but I also have four kids and a tight budget so CI, famous-smoke, etc. are where I tend to get my smokes. I’m all for the B&Ms, but I won’t go to the extremes that some people I know to where they refuse to buy online. It’s inevitable that people are going to buy the cheaper alternative. How many of us probably drive and wear products that were not made in the U.S. due to prices?
Another growing problem is the smoking bans that have been placed. I live in Ohio and you can’t smoke in any establishment (not even bars and some smoke shops). The smoke shops (B&Ms) that do technically allow smoking have started to refuse the right of their customer to smoke in fear of breaking laws. So what does going to a B&M get me over the online stores if I’m going to just end up smoking it at home anyways?
I definitely agree that it’s a growing problem, and I wish things were different but I really don’t get the animosity toward the bigger guys like CI, etc. Most of us aren’t picketing at Walmart.. we’re buying there instead because of the prices and selection.
I have found in Toronto Fortinos grocery store hPave cigar shops which carry a fairly decent ( not great) selection of cigars at a fairly reasonable price.
The difference is that with the new smoking laws you are no longer able to go into their humidors and pick out your cigars bit instead you need to look at tu through a binder and then request which ones you want.
Not the best way to purchase cigars but the price is fair. It’s also fairly convenient. Purchase your groceries then purchase your cigars.
Thanks for your comment! The fact that they cover up the cigars and you have to choose from a list is very weird. The government believes that hiding them from plain site will deter younger people from purchasing them.
I was going to mention this in the article the above mentioned “hiding” of cigars is only for small shops. Any true B&M that is designated as a proper “tobacconist” is permitted to display cigars freely. As those places start to dwindle, we may just be ordering cigars from lists from now on… Kinda sad…
I find the tobacco taxes and duties are ridiculous in Canada. Government think that by hiking tobacco taxes it’ll stop people from smoking. It’s amazing how societies keep on making the same mistakes. The Prohibition back in the 1920’s proved that if people want something, someone will provide it.
Currently in Ontario about fifty percent of tobacco smoked is black market. Take a look at this article http://www.csnews.com/csn/cat_management/tobacco/article_display.jsp?vnu_content_id=1004081445 . In Quebec more teens are smoking even though cigarette prices are currently at $10 per pack. One thing’s for sure, they’re not getting the smokes at the convenience stores. Here’s a story on teens smoking in Quebec. http://www.montrealgazette.com/health/More+Quebec+teens+taking+smoking/2538171/story.html
The same is true for cigars. People who enjoy smoking cigars will find a way to get them and smoke. But just like this article states, because of how expensive they are people are finding ways to get them, making the local B&M go out of business.
Anyway, enough ranting. Good article. I look forward to part two.
This is what happens when the power of special interest groups i.e. WHO, and ACS, grow so big they begin to set policy and influence the laws and taxes that are passed. This is why the CRA is so important to support so we have a voice and can try to counter act the blatantly false information that is put out by these organizations, and the damage they cause to small business like the local B&Ms.
Yet one more reason why I dislike visiting America’s hat.
Are you certain about shipping across State lines?? As long as the tax is paid I thought it’s all good. There has to be a tax stamp applied and through it goes. I could be completely wrong here, but I also thought this had a lot more to do with online sales. Regardless, great topic!!!
Hi Tom, thanks for the comment!
You can actually see this happening in NY already where a lot of online shops refuse to ship to the state. I’m sure if proper taxes are paid it would go through but then what’s the benefit of buying anywhere else if the extra taxes you pay to be clear result in sticks being the same price?
If a shipment of cigars coming into Canada get’s stuck at Customs and opened, a $100 order could easily turn into $300-$400 in duty and taxes to me! It’s crazy, right? lol
thats if they don’t outright confiscate it and give you a
fine for fraud or something, I think the risk can still be worth
it, especially if you only order 1 or 2 boxes at a time.
True . Would be interesting to do a case study on actual costs for a box of sticks purchased out of the USA and shipped to Canada versus the cost for the same box bought here from a B&M. Taxes, shipping costs, markups and profit, versus the Canadian dollar, taxes, markup etc. The other thing I’ve found is selection here in Toronto is not so good. Everything you said in your article rings true about our B&M’s. Best choice for us Canadians is to form a club with people liking to vacation in Cigar friendly countries. And we put in our orders when anyone heads south.
Not a single one of you understand the article.
hes trying to explain to americans how canadians deal with this; derp derp.