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April
2003

PuroExpress.Com
TOBACCO INDUSTRY NEWS

Kretek International Acquires Quintin USA

Moorpark, CA - Kretek International has completed the acquisition of tobacco importer and distributor Quintin USA and Quintin International. The Quintin companies are importers and full-line distributors of cigarettes, cigars, lighters, and smoking accessories, and have been providing quality product and service to resellers for over 30 years. Financial details of the transaction, which included the Quintin name and all assets, were not disclosed.

Quintin will continue its commitment to provide a "one-stop" source for cigarettes, cigars, tobaccos, and accessories and will operate from its current headquarters in Steamboat Springs, Colorado.

Quintin's key sales and services personnel have been retained in the newly formed Quintin International, which became fully operational on March 10. Inventory levels have since been brought up to meet demand, Kretek International said in a statement.

Quintin has also begun shipping products and promotions to accounts in all of its newly acquired markets, including the greater New York region. "We have been looking forward to offering our product and services in the New York marketplace for some time now," said Kretek International's executive vice president, Mark Cassar.

"Until recently, we have not been licensed to sell in the state of New York, Maine, Connecticut, Rhode Island, and Maryland," noted Cassar. "Our acquisition of Quintin International has changed its market position in the very lucrative New York market."

Cassar said that Quintin customers can now benefit from second day product delivery and free freight programs on minimum orders. "We are sure we will be able to impress the customers in these markets. No longer do accounts in the east have to worry about long lead times to get merchandise from a west coast distributor," added Quintin International's general sales manager, Jeffrey Yeager.

Quintin now holds stamping licenses in all 50 states and the District of Columbia, distribute into all states via UPS and FedEx. Kretek International is a subsequent participating manufacturer in the Master Settlement Agreement and all of its products are fully compliant.

Quintin International, Toll-free: (800) 359-4170.


Star Sells Cigarette Business to NATC

Chester, VA - Star Scientific, Inc. has agreed to sell the cigarette business operated by its wholly owned subsidiary, Star Tobacco, Inc., to North Atlantic Trading Company, Inc. for $80 million in cash, subject to certain adjustments as described in the asset purchase agreement. The agreement provides for the sale of substantially all of the assets and certain liabilities that relate to the company's manufacturing and marketing of its four cigarette brands. Sales of those brands traditionally have generated the majority of the company's revenues.

Star Scientific's cigarette and moist snuff manufacturing facility in Petersburg, Va. will be transferred as part of the transaction, as will the equipment and property of Star Tobacco's Chester, Virginia sales and administrative offices. The Star Tobacco sales force that has been focused on cigarette sales will be given offers of employment by the purchaser, as will approximately 90 other Star Tobacco employees.

Star Scientific will retain its other core businesses and assets, which include its leaf sales, licensing, and smokeless tobacco product businesses; its Bethesda, Md. offices, its Chase City tobacco processing facility and recently expanded Ariva manufacturing facilities; the StarCured tobacco curing equipment and barns; and its rights to eight product and process patents to which it is the exclusive licensee. It will also retain its MSA escrow deposits, totaling about $33.4 million.


Music City Marketing Named Dunhill Pipes Distributor

London - Alfred Dunhill Americas LLC announced it will close its U.S. wholesale distribution business for Dunhill pipes, lighters, and smokers' accessories at the end of April.

Dunhill executives stress that the decision has not been taken lightly, especially in view of the fact that they have been active within the American market since the early 1920's. The company simultaneously announced a new distribution arrangement with Music City Marketing, Inc. of Nashville, Tenn. and said it is "looking forward to continuing the sterling work that has been accomplished in recent years."

Simon Glendenning, managing director of Alfred Dunhill Pipes Limited, said, "Through the past three years we have concentrated upon restoring the Dunhill brand to an exclusive network of retail customers throughout the U.S. This has now been accomplished, and the time is right to broaden our horizons. I am confident that by working closely with the team at Music City Marketing that we can continue this sense of exclusivity whilst simultaneously reaching out to new customers."

J.T. Thompson, president of Music City Marketing, Inc. responded, "It's an honor and privilege to work in partnership with Dunhill, one of the world's leaders in pipes and smoking accessories. It's rewarding to watch our relationship grow with Dunhill, as we continue to expand our role. We work closely with a network of retailers across the U.S. which will provide more opportunity for growth while making Dunhill products more accessible to the consumers."

Music City Marketing, Inc. is the exclusive U.S. distributor for other pipes including Stanwell, Butz-Choquin, Charatan, Winslow and Falcon. The company, headquartered in Nashville, Tenn., is also a national distribution wholesaler for cigars, tobacco, smoking accessories, gifts and other merchandise. For more information, call 1-800-251-3016 or visit the website at www.musiccitymarketing.com.


Smokers Help Design Private Label Cigars in Novel Program from Tabacalera Tropical

Miami - Tabacalera Tropical has launched its new Private Blending Campaign. It complements, and provides a powerful new product development and marketing tool, for the company's Private Brand Program, introduced at RTDA 2002.

Tropical's ambitious Private Brand Program allows retailers to design their own private brand cigars. A "Private Brand Kit" lets retailers select more than 20 different variations of five wrapper tobaccos, with filler blends that harmonize with the selection. They can also tailor their bands and boxes from the catalog. Bundles are also available.

The new blending session enlists participating retailers and their best customers in a hands-on evaluation and tweaking of blends, for what becomes the retailer's proprietary cigars

"Aganorsa, our new partner, has over 500 acres of Cuban-seed, shade-grown wrapper leaf and 320 acres of sun-grown Habano tobacco under cultivation in Jalapa, Nicaragua," says Paul Palmer, Tropical's vice president, adding, "In nearby Esteli, they grow powerful ligero leaf, on another 150 acres. We have some of the best tobacco in the industry."

Palmer, accompanied by Cuban master cigar roller José "Pepin" Garcia, has already appeared at many retailers to coordinate blending sessions. In some cases, the retailer organizes the event as a working dinner. Several veteran smokers, by invitation from the retailer, sample a number of cigar versions, rolled on the spot by the Garcia. They sample the mild-to-medium blends first, then work up to the strong and extra-strong blends. On-the-spot feedback from the retailer and his customers helps fine-tune the trial cigars, resulting in a final blend the retailer will carry in his store.

The blending session program offers other long-term benefits. "Tropical has ambitious plans for its own branded cigars, and the experience and feedback we're getting from these and future blending sessions is valuable," says Palmer. "They will result in new, exciting Cacique blends for novice as well as experienced cigar lovers."

Reports from participating retailers have been equally enthusiastic. "Fifteen of our long-term customers attended our blending meeting," says Todd Trahan, owner of Cigar Merchant, in Atlanta, Ga. "After three samplings, we had the blend we knew would be a hit. Getting our customers involved was a brilliant idea, and we know our private brand cigars will be a success with them and everyone they talk to."

Interested retailers can contact Tropical Tobacco for a "Private Brand Kit," and to arrange a blending session with their customers.

Tropical Tobacco, Inc., 3010 NW 79th Ave., Miami, Fla. 33122, Toll-free: (800) 826-7030, Fax: (305) 592-3735, Web: www.tropicaltobacco.com.



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