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Habanos S.A. Weeds out Corrupt Higher-ups

Manuel Garcia, long-time vice president of Habanos S.A., has been arrested, and he and 10 of his staff may face corruption charges, according to an article in the Economist. Cuban investigators believe that Garcia and 10 of his staff sold up to 45 million genuine Cuban cigars to black market retailers in the Carribean in exchange for bribes. The part of this story that sticks out to me is that Garcia has been in jail since August, and it’s just now being reported. Neither Cubatabaco or Imperial Tobacco could be reached for comment.

According to the Economist, a single Cuban cigar sold in the UK will fetch as much as 40 GBP, or $65 USD. Because black market activity like this allows companies to undercut these shops, many tobacconists have been faced with major losses in the last few years. On a vaguely related note, a lot of the Cuban cigars that were seized at O’Hare Airport in Chicago last year probably came from some of these black market vendors.

I have mixed feelings about this kind of undercutting and the corruption charges. On the one hand, this activity could’ve been bleeding the Cuban cigar industry dry. But on the other hand, how much of those potential profits would’ve made it down to the Cuban people, whose yearly per capita income was under $10,000 USD as recently as 2010? Regardless, it’s a step in the right direction to weed out some of Cuba’s corruption, and I’m glad Garcia and his lackeys have been brought to justice.