Why are Asia’s affluent obsessed with Cuban cigars?

Luxury cigars have found an eager market in Asia, particularly among the region’s ultra-wealthy.

Cuba’s premier cigar manufacturer, Habanos SA, reported record-breaking sales of $827 million in 2024, marking a 16 per cent increase from the previous year. The surge is largely credited to the booming demand in Asia, with China leading the way.

Speaking to Reuters, Jorge Perez, Vice President of Habanos, highlighted that Asia now accounts for nearly a quarter of the company’s global sales, further cementing the cigar’s status as a luxury symbol among the elite.

This rapid growth comes despite significant setbacks, including hurricanes that devastated Cuba’s key tobacco-growing provinces, Artemisa and Pinar del Rio. However, Jose Maria Lopez, another Habanos executive, reassured that the production of high-quality cigars remains secure.

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“The total tobacco production in Cuba may be reduced, but those are poorer quality tobaccos that would never enter the production of our export cigars,” Lopez told Reuters.

Cuba’s cigars, long praised for their rich aroma, ideal climate, and hand-rolled craftsmanship, remain a pinnacle of luxury. The country’s cigar industry, alongside rum exports, is one of its last strongholds of economic stability, providing much-needed foreign exchange for essentials like food, fuel, and medicine.

Executives at Habanos noted that China once again led global sales in terms of value, followed by Spain, Switzerland, Britain, and Germany.

The expanding luxury cigar market in India

Beyond China, India’s cigar industry is also experiencing remarkable growth. According to Horizon Grand View research, the Indian cigar and cigarillos market is projected to reach $5.58 billion by 2030, growing at a compound annual growth rate (CAGR) of 6.5 per cent from 2024.

In 2023 alone, the market generated $3.58 billion in revenue, accounting for 7 per cent of the global cigar and cigarillos market.

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Premium cigars are emerging as a status symbol among urban professionals and younger consumers, who are increasingly drawn to Western luxury lifestyles. The rising popularity of cigar lounges and exclusive smoking clubs further reflects this shift in consumer behaviour.

Flavoured cigars, including vanilla and mint varieties, are also attracting new demographics, including women and younger smokers, who seek a smoother smoking experience.

Mass-market cigars dominated sales in India in 2023, making up 86.35 per cent of the total market. However, the premium cigar segment is projected to see the fastest growth, indicating a shift toward luxury and exclusivity in smoking habits.

China’s complex relationship with tobacco

While many countries have enforced strict anti-tobacco regulations leading to a sharp decline in smoking, China presents a unique case.

Research suggests that cigarette sales in the country have continued to rise in recent years, with analysts attributing this trend to weak enforcement of smoking laws and the government’s reliance on tobacco revenue, reported Australian Financial Review, an Australian business-focused newspaper.

Despite a push nearly a decade ago to curb smoking, China produced 2.4 trillion cigarettes in 2023. The number has increased each year over the past five years, rising by more than 35 per cent compared to 2003.

According to Euromonitor, China’s share of global cigarette sales grew to 47 per cent in 2023 from less than 38 per cent in 2009.

A major factor behind this trend is the China National Tobacco Corporation (CNTC), which holds a monopoly over the country’s tobacco industry. In 2023, CNTC generated $2.4 billion in tax revenue, making up approximately 7 per cent of central government revenue.

The organisation, together with the State Tobacco Monopoly Administration, employs over half a million people, further entrenching its influence in the country.

Though China ratified the WHO’s Framework Convention on Tobacco Control in 2003, enforcement has been left to local governments, resulting in a fragmented and often ineffective system of smoking restrictions.

While Beijing introduced a citywide indoor smoking ban in 2015, followed by similar measures in Shanghai and Shenzhen in 2017, a nationwide crackdown has not materialised, partly due to resistance from the powerful tobacco industry.

The cost of cigarettes in China varies widely, with prices ranging from under 10 yuan per pack to over 100 yuan for premium brands. Ornately packaged cigarettes tied to national landmarks and hometown traditions remain highly popular.

Unlike in some Western countries, China has not adopted plain packaging laws, and its regulations on health warnings remain relatively weak.

The future of luxury cigars in Asia

Asia’s growing affluence is reshaping global luxury markets, with Cuban cigars standing as a prime example. The increasing demand for high-end cigars in China, India, and beyond signals a shift in consumer preferences toward premium products.

While Cuba continues to recover from natural disasters and faces challenges in maintaining stable tobacco production, its ability to meet international demand remains crucial to sustaining its cigar industry.

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Meanwhile, India’s expanding luxury sector and China’s complex relationship with tobacco suggest that the cigar industry in Asia will remain dynamic for years to come.

With a rising number of exclusive cigar lounges, high-profile collectors, and premium product offerings, Asia’s wealthy elite show no signs of slowing down their appetite for the finest cigars the world has to offer.

With inputs from agencies