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greenmtnsmoke

Starting to Get Obsessed
Dec 8, 2018
108
1,413
Hello Everyone,
I have seen more Esoterica blends available in the last six months than I have seen in years. I was wondering if they increased production or if there was some other reason? I saw on the news that when England officially leaves the EU they will have to negotiate a new trade deal with the US. How will this affect the supply of pipe tobacco from England and could this be the reason for the increased availability of Esoterica blends? Are they just dumping their stock of US bound tobacco before the deadline and anticipating a down period?

 

aldecaker

Lifer
Feb 13, 2015
4,407
42
"...could this be the reason for the increased availability of Esoterica blends?"
It seems more likely that the fervor is dying down and fewer people are chasing after it like a one-legged loony after a big white whale.
Just for the record, I am in no way an expert on trade policy!

 

economistandfisherman

Starting to Get Obsessed
Dec 11, 2018
257
3
You'll see the pound fall against the dollar until a new deal is negotiated (with both the US and EU). Back in 2016, if I remember correctly, the pound was trading about 15% higher against the dollar, now it's around 1.20 dollars per pound I think. Right now what's driving the fall in the pound is that Teresa May's government can't seem to get an EU negotiation sealed, once that happens, the pound with pop up a bit.
So, to answer your question, if this firm anticipates a further fall in the pound, this means that they will get fewer US dollars from a tobacco sale in the future than they would get now, so it pays for them to dump as much tobacco now as they can, even if they have to put it on sale. This way, once they repatriate their revenues after the pound falls further, they'll get even more pounds per dollar...kind of like extra profit. But, this is something of a gamble because as you rightly pointed out, if they do seal a deal, the pound will pop up again, and any tobacco they have over here, once sold in US dollars, will buy them fewer pounds when they repatriate their revenues into British currency.

 

sablebrush52

The Bard Of Barlings
Jun 15, 2013
19,621
44,832
Southern Oregon
jrs457.wixsite.com
I have seen more Esoterica blends available in the last six months than I have seen in years.
It's happened before. After years of small and inconsistent shipments, word came in late 2015 that Germain's would return to making more Esoterica product and we saw much more availability in 2016. Availability comes and goes. Germain's is a small shop, handling a wide variety of blends, and availability probably depends on where they're focusing their efforts.

 

npod

Lifer
Jun 11, 2017
2,942
1,024
Thanks @economistandfisherman. That was a great comment and full of information to noodle around.

 

economistandfisherman

Starting to Get Obsessed
Dec 11, 2018
257
3
Thanks Neal; one caveat though is that my outline above assumes that these various US websites are brokers for the product, i.e., the producer sends them the product to sell for them. However, if places like Smokingpipes and such are actually purchasing the product outright, then the reason greenmtnsmoke sees more out there is simply because US firms are anticipating a rise in the pound (fall in the dollar), which means the product becomes more expensive to purchase in the future so it behooves them to stock up now while its cheap in exchange rate terms. Either one could be occurring...and so could sadlebrush's reason, i.e., its just ramped up production of this batch and needs to dump it. Any of these scenarios could be true, and maybe a combination of any two frankly. Small foreign firms (as sadlebrush said this firm is) are particularly sensitive to exchange rate fluctuations, and taking advantage of these fluctuations could mean an extra 20 or 30% in profit for them.

 

jpmcwjr

Moderator
Staff member
May 12, 2015
24,565
27,065
Carmel Valley, CA
Pinning Esoterica tobaccos' availability or price on macro economics is not going to get anyone very far. It's far too tiny, and while FX markets will react to factors stated above, and trade barriers will rise and fall, there are too many other factors at play. For instance, what management of Germain's decides as to production, releases and pricing.

 
May 8, 2017
1,593
1,627
Sugar Grove, IL, USA
The drops do seem more frequent this year and I have a hunch that some hoarders have hoarded are realizing that they have enough and are leaving some for others to buy. I have it on good authority from a tobacco broker that the resale market for Esoterica tobaccos has cooled a bit, too, so prices have fallen some. Glad I sold my excess a couple months ago.

 

sablebrush52

The Bard Of Barlings
Jun 15, 2013
19,621
44,832
Southern Oregon
jrs457.wixsite.com
Germain's is a small boutique operation, supposedly 6 or 7 employees, and they use some very old, as in antique (the press used for making Stonehaven is supposedly close to 200 years old), machinery in producing some of their blends. Factor in that they are very traditional in their approach to the blends that they produce, aging them prior to releasing them, such that they are ready to smoke upon release. The resulting production time line would be a fairly long one, making predictions a guess at best. There are blends, like Krumble Kake, that are supposedly still in production and it's been what, 5 years or more since they released any? So it might be that, having heard the wailing and gnashing of teeth over the availability of their products for a number of years, their response is finally hitting the shelves. After all, prior to 2006, it wasn't exactly difficult to walk into a tobacconist and pick up a bag.

 
M

mothernaturewilleatusallforbreakfast

Guest
An increase in availability has something to do with the availability of quality leaf. I'm guessing that maybe they found what they needed to make certain blends work well enough for manufacturing and distribution?

 

greeneyes

Lifer
Jun 5, 2018
2,125
12,189
Let's not forget that Germain's tobaccos are available year-round in other countries, notably the UK. However for historic reasons, their tobacco products don't have the market dynamics in the UK that their Esoterica line has in the USA, i.e. there is no scarcity and thus people don't hoarde and buy out the stock feverishly. Finally, there are several Esoterica blends that are simply re-branded Germain's blends which are available, again, year-round in the UK.
My guess is that what you're seeing is simply a little fine-tuning on the part of Arango and Germain's in an attempt to sell more product while avoiding losing the perception of exclusivity and apparent scarcity that drives demand.

 

sablebrush52

The Bard Of Barlings
Jun 15, 2013
19,621
44,832
Southern Oregon
jrs457.wixsite.com
Finally, there are several Esoterica blends that are simply re-branded Germain's blends which are available, again, year-round in the UK.
RDF is very similar to Stonehaven, but not the same. It's a little more Virginia forward and there's a hint of an ale in the topping. All of the Esoterica blends were created from blends available in Germain's catalog of blends that they had created for private labels. The blends were further tweaked for Steve Richman. I'm curious, what other Esoterica blends are repackaged and sold in the UK?

 

greenmtnsmoke

Starting to Get Obsessed
Dec 8, 2018
108
1,413
I have also seen tons of sg fvf in the same time period. The size of a company is irrelevant as all are subject to same trade laws.Great answers everyone, thanks.

 

tavol

Starting to Get Obsessed
Mar 23, 2018
175
172
However for historic reasons, their tobacco products don't have the market dynamics in the UK that their Esoterica line has in the USA, i.e. there is no scarcity and thus people don't hoarde and buy out the stock feverishly. Finally, there are several Esoterica blends that are simply re-branded Germain's blends which are available, again, year-round in the UK
Perhaps the reason there is supply all year round is because UK smokers don't hoard and buy the stock feverishly? Perhaps American pipe smokers are their own worst enemy when it comes to blend availability?

 

economistandfisherman

Starting to Get Obsessed
Dec 11, 2018
257
3
The size of a company is irrelevant as all are subject to same trade laws.
I wholeheartedly agree; in fact, exchange rates hit the bottom lines of small operations much harder than larger operations that can more easily diversify their risk to exchange rate fluctuations between any two countries. Colleagues of mine in Europe have told me at conferences that a smallish 10 to 15% strengthening of their home currencies (mainly the euro, but not all) can generate a 7% to 10% decline in sales for products in general to foreign markets. This means that playing the exchange rate game (i.e., selling product sooner rather than later) can increase their profitability substantially during these periods--this potential profitability means a lot to a firm of 5 or 10 employees especially.

 

mso489

Lifer
Feb 21, 2013
41,210
60,433
I'm not sure understanding trade policy predicts much of anything. Economics is so full of unintended consequences, many unexpected results predominate.

 
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