Marino Murillo Disrupts Tabacuba’s ‘Ordering Tasks’* and Leaves Cigarette Production at 47 Percent

Cubans are increasingly turning to the black market to get cigarettes. (ACN)

14ymedio bigger14ymedio, Madrid, 2 August 2022 — When Marino Murillo was appointed president of Tabacuba in November 2021, many Cubans reacted with irony. “I hope he won’t ‘Re-order’ Tabacuba, or we’ll run out of cigarettes,” one reader wrote, joking in reference to the so-called ‘Ordering Task’* which is affecting broad elements of the Cuban economy. The joke has come true, and the worst omens have been more than fulfilled. The state tobacco company, which then warned that the lack of cigarettes would continue until the first quarter of 2022, announced on Monday that the amount planned for the first half of the year doesn’t even reach half of the original goal.

“The production plan of the state factories from January to June 2022 is fulfilled at 47%,” explains the official newspaper Granma in a note dedicated to the scarcity of the product and its causes. The delay “is mainly due to the lack of raw materials used in the cigarette industry, such as cigarette paper, boxes and wrapping paper (wheel or cigarette package), which caused the factory to be paralyzed in January, March and May,” sources of the business group said.

Tabacuba has four state factories in the country: Segundo Quincosa, in Havana; Ramiro Lavandero, in Villa Clara; Juan D’ Mata Reyes, in Sancti Spíritus; and Lázaro Peña, in Holguín. The first three have been operating normally since the last halt in May, although the article already warns that materials are guaranteed only until September. Then, we’ll see.

The fourth, in Holguín, stopped in August and will continue to be halted, at the very least, all month, due to the lack of packaging. “The paper used in their manufacture will arrive in the country in the first half of August and must be processed in the printing presses before arriving at the factory,” the managers add.

In addition to the problems caused by the lack of liquidity, the international context hasn’t helped due to the lack of available ships and delays in maritime traffic. Other causes were the increase in the price of raw materials and the distance from the supplying countries. Also, the lack of energy has a lot to do with the drop in production, since factories must stop between 11 and 1 to save electricity.

Faced with such an outlook, Tabacuba has established some measures to try to recover manufacturing levels, although the very low level they have reached complicates the objective. Work shifts, for example, have been increased to two per day and on some Saturdays, and vacation times have been reduced.

Tabacuba also aspires to find suppliers on the island to avoid the costs and difficulties of importing, but so far it’s nothing more than a wish expressed out loud, and it’s hard to believe that, if such an option exists, it hasn’t been used before.

Meanwhile, Brascuba Cigarrillos, a joint venture in the Mariel Special Development Zone, is helping to alleviate the situation. The company’s production plan, which manufactures H. Upmann, Popular with filter, Rothmans, Dunhill and Cohiba, meets the target at 86% and has three work shifts seven days a week, says Granma.

“Brascuba not only sells directly to the store chains but also to the Tobacco Marketing Company in Rama La Vega, and they, in turn, to the Wholesale Marketing Company of Food Products (EMPA), which is in charge of distribution and marketing to units of the retail trade network,” say the directors, who specified that Tabacuba must subsidize the dollar cost of production so that they can sell in Cuban pesos. An unusual public investment in a product harmful to health.

Problems with the domestic production of cigarettes date back at least to 2020, when there was no money to buy wrapping paper and other materials indispensable for manufacturing. In 2021, breaks in machinery, the pandemic and the lack of transport fuel increased the problems.

Due to the shortage of the product, cigarettes became rationed at the territorial level, and consumers had to present their ration book to purchase them. The objective was, the authorities argued, “to prevent the hoarding and resale of this product,” but the end hasn’t been achieved and has unleashed subterfuge for the umpteenth time. With the beginning of the sale in the bodegas (ration stores), many have not hesitated to use other people’s ration books to buy them.

Sales on the black market continue. Cigarettes that are rationed cost 10 pesos a pack, but on the black market the price exceeds 100 pesos, and some like the Rothmans are even more than 200, a price similar to that of stores that only take payment in freely convertible currency and where, in addition, you have to line up.

Meanwhile, and despite the fact that cigars continue to report significant dividends in exports for the country, the fall this year was 13%. In recent days, the Government has announced its intention to launch a luxury tourism project linked to cigars. It is a high-end hotel that will open in September to promote the tourist-focused Cigar Trail in the Pinar del Río area that will have, in addition to lodging, an information center, a smoking room and a specialized shop.

But at the same time, the provincial newspaper Guerrillero revealed that the harvest is expected, as is customary in almost everything, to be bad. “There are limitations due to energy, humidity in the raw material, a deficit of covers for packaging and an excess of unbound tobacco in warehouses and selected by companies, which affect profit flow,” Pedro Rafael González Lorenzo, coordinator of the production programs, said last Thursday.

Of the 5,945 tons planned until July 22, only 5,000 could be collected, due to the lack of diesel and electricity. In addition, there are delays in the construction of tobacco cure rooms, which are at 29% of what is scheduled, and also delays in the repairs of those that already exist, which are at only 50%.

 *Translator’s note: The “Ordering Task” is a collection of measures that include eliminating the Cuban Convertible Peso (CUC), leaving the Cuban peso as the only national currency, raising prices, raising salaries (but not as much as prices), opening stores that take payment only in hard currency which must be in the form of specially issued pre-paid debit cards, and a broad range of other measures targeted to different elements of the Cuban economy. 

Translated by Regina Anavy


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