U.S. Distribution Changes for Mac Baren as Well
Richmond, VA – Today it was announced that the Mac Baren Tobacco Company of Denmark has agreed to buy the Pipe Tobacco Division of Altadis USA in Richmond, Virginia. The transfer of ownership will be final on or about May 1, 2013.
With the new ownership comes a new / old name for the company. Altadis USA Pipe Tobacco Division will now be a stand-alone company named Sutliff Tobacco Company. This was the original name of the business when H.W. Sutliff founded it in San Francisco in 1849.
All production and distribution will remain the same, including product lines that do not contain the Sutliff brand name, such as Tobacco Galleria pouches. In other words, everything made in the Richmond factory will continue to be produced and distributed just as before. The product mix will not be limited to Sutliff-branded products, even though that will be the new company name.
In time, the pace of new product introductions from Sutliff is expected to increase, and there may be new jobs created with the need for an expanded salesforce. (No layoffs are anticipated with the new ownership.) Additional salespeople may be needed to take over the Mac Baren distribution from Phillips & King International.
As part of the deal, Sutliff Tobacco Company will be the new U.S. importer / distributor of Mac Baren products. There are synergies with Sutliff’s stronger focus on pipe tobacco, which should increase market share of Mac Baren products in the U.S. Sutliff’s retailer-base is more closely aligned with Mac Baren’s. The former distributor, P&K is involved in several other product categories that did not afford them the opportunity to focus solely on pipe tobacco. (All Mac Baren products will continue to be made in their factory in Denmark. See the factory video tour here.)
In a quid pro quo, Mac Baren will distribute Sutliff products outside of the U.S. It seems both organizations are poised for increased sales and market share globally.
In a telephone conversation with Paul Creasy, the former General Manager of the Altadis division, and now President of the new company, he spoke about how this deal will reinvigorate the Sutliff Tobacco Company. "The last time this company was owned by an actual pipe tobacco company was 1969! This deal has been in the works for over a year, and I’m thrilled to have it come to fruition."
"Commonwealth-Altadis is in the cigarette and cigar business. Pipe tobacco is so different and so small that it doesn’t even merit an asterisks in the annual report. On the other hand, The Halberg Family has owned Mac Baren Tobacco Company for 125 years. They are pipe tobacco people." (In other words, they "get it.")
"I’ve known all of the guys at Mac Baren for years. I’ve been to the factory in Denmark, we see each other at shows… you should remember to always be nice to people because you never know who you’re going to end up working for."
Creasy explained that being owned by an actual pipe tobacco company will make it much easier to allocate resources for new products and marketing. He expects there to be an increase in new product introductions and promotions as the bureaucratic handcuffs have been removed, so-to-speak.
"It’s hard to make the case for a new flake that will set the pipe tobacco world tingling, but not even register on the radar of a large company—cigarette people deal in billions, cigar people deal in millions and pipe tobacco people deal in thousands. Thousands still means something to us. They don’t mean as much to very large corporations. Expect to see more new products and promotions in the future."
Since the Sutliff Pipe Tobacco Company has such a history, and part of the appeal of pipe smoking for some people is the nostalgia, we asked Creasy if some old, historic Sutliff blends may be brought back.
He quipped; "Well, we could bring back Carolina Queen, which was probably last on the market when Benjamin Harrison was in office." (Benjamin Harrison was the 23rd President of the U.S. from 1889 – 1893.)
History of Sutliff Tobacco Company as told by Paul Creasy via telephone
It’s a long history. When I originally came to the company 25-years ago, it was referred to as the Sutliff Division (1988). The Sutliff family owned the company from 1849 to 1969 when it was bought by Consolidated Cigar. Gordon Sutliff the great, great, great nephew of the founder of Sutliff comes to our Christmas party every once in a while. He sold the company to Consolidated Cigar in 1969.
Consolidated Cigar went through many different ownerships—it was owned by Gulf & Western, it was private, it went public, there was a leveraged buy-out, and then eventually in 1999—Seita, the French tobacco monopoly bought Consolidated Cigar. They only owned it briefly, then Seita and Tabacalera De España merged (and this is all unrelated to pipe tobacco – we’re just a rider on this roller coaster ride) … Altadis was formed from this merger. At the same time Tabacalera De España owned Hav-A-Tampa and Seita owned Consolidated Cigar, so now the two major cigar companies in the country are merged together because their two parent companies merged. That was around 2000-2001. Altadis USA was founded as a subsidiary of the parent company in Spain.
Altadis was then purchased by Imperial Tobacco in 2008. Prior to the purchase of Altadis, Imperial Tobacco owned Commonwealth Cigarettes here in the United States. Commonwealth Brands (cigarettes) and Altadis USA (cigars) merged to become Commonwealth-Altadis USA. In the meantime, we’re just this little pipe tobacco company along for the ride.
Commonwealth-Altadis, which is now one company that has just gotten progressively bigger, is selling the Pipe Tobacco Division separately to Mac Baren Tobacco Company. We have now come full circle and will once again become Sutliff Tobacco Company, as a stand-alone, separate business with operations being maintained in Richmond Virginia. We are a separate business from Mac Baren, but owned by them, officially around May 1st.