Post from Jeremy McKenna on Mac Baren closure

[badbriar]

Damn - Just Damn! After reading this info piece from JK, I have to apologize to STG for believing and blaming that company for the demise of Mac B and Sutliff. Seems that, once again, our own government has royally screwed us.
As was said here previously, no big surprise. The do-gooders that abhor tobacco, alcohol, and any other 'sin tax' items are out of control. IMHO, if those tools in the government don't like something, they simply can avoid using/consuming those items. No need to push their false morals on the rest of us. So much for the US being a free country! I am deeply saddened to learn that we in the US did this to ourselves.

 

[badbriar]

Why do companies have bankers and bean counters on the BOD that do not have the same product or manufacture interests as the owners? This outcome should not have been a surprise to anyone. Unfortunately, the controlling interest owner was a bit short sighted on the continuation of the business. That, or he did not care what happened after his passing.

 

[crashthegrey]

I would agree that if the company had been handed down to someone passionate about tobacco, there would have been a chance at continued profitability.

It was profitable, and continuing to be so. The Board just dislikes the optics of owning a tobacco company when clean living is apparently a lot of their other focus.

 

[Pip'n'Piper]

I’ll bet Missouri has the cheapest (and best) quasi legal cannabis in the world

...Missouri? For real? Man, what you been smokin'? I will take that bet, sir.

 

[LeafErikson]

Politicians don’t give a rat’s ass about tax dollars, as long as they get theirs. They are perfectly happy to spend trillions that don’t exist.

I wouldn’t trust this woodsroad guy… he’s bad news. I saw his face on a bunch of commie tobacco tins in my local cigar shop.

 

[Scottmi]

This must be the 4th or 7th or... extended thread I have read through on this board regarding this notorious event. So many interesting side notes though that i just keep reading, as agitating as some of it is. Can I ever get back to blissfully ignorant enjoyment?

 

[Peterson314]

I mean.... Jeremy's post wasn't far off from what we learned from Bradley.

And while I'm as happy to bitch about the government as the next guy, I did find it a bit frustrating that Jeremy stated that the private family-owned company sold to a corporation, who made the cold-hearted corporate decisions that corporations make, therefore: too much government.

 

[HawkeyeLinus]

Why do companies have bankers and bean counters on the BOD that do not have the same product or manufacture interests as the owners? This outcome should not have been a surprise to anyone. Unfortunately, the controlling interest owner was a bit short sighted on the continuation of the business. That, or he did not care what happened after his passing.

Neither short sided, nor not caring necessarily follow.

 

[woodsroad]

I mean.... Jeremy's post wasn't far off from what we learned from Bradley.

And while I'm as happy to bitch about the government as the next guy, I did find it a bit frustrating that Jeremy stated that the private family-owned company sold to a corporation, who made the cold-hearted corporate decisions that corporations make, therefore: too much government.

Uh, yeah…no.
Governments created the conditions that have collapsed the customer base of tobacco. With only a few large manufacturers left, it was unlikely to see a bidding war among producers large enough and financially strong enough to take on the continuation of Mac Baren’s product line.

 

[Mike N]

And this famous Warren Buffett quote about tobacco:

 

[Peterson314]

Uh, yeah…no.
Governments created the conditions that have collapsed the customer base of tobacco. [snip]

I wasn't going back that far.

I was commenting on Jeremy's discussion about the FDA regulations. It read to me that he had started the process of filing some applications on some of his products, but the FDA didn't know what they wanted. The FDA tried to target bubblegum-flavored vape juice. They hit us because they totally forgot that pipe tobacco existed. Not a word about pipe tobacco in the entire 2022 FDA plan. The result was that the FDA asked for more information because they had zero guidance.

Jeremy then created and sold a bunch of non-compliant special projects with no hassle. He paid some lawyers, made some estimates, and crafted some business plans to chart a course for his company's future. Then, a giant corporation swooped in and took all of his problems away, along with his job and his entire company. And then, the giant corporation just threw it all away because the bean counters said to.

 

[NookersTheCat]

Well at least this should finally put all the "Don't worry about it, quit bitching, there's still plenty of fish in the sea, etc." too-cool-for-school nonsense to rest, though God knows it won't.

Ours is a niche of a niche hobby nestled inside a politically flogged industry. Of course the main impediment is the government, followed closely by the grossly incompetent Frankenstein monster crony quasi-corporations their monetary policies have created. (Not to get political or anything... )

Going forward, the long and the short of it is what most of us have been saying/knowing since McClelland... expect higher prices, less selection/availability, and an ever shrinking/stagnating market which will slowly crush those who are small and cater to the small. Act accordingly...

 

[sablebrush52]

I wasn't going back that far.

I was commenting on Jeremy's discussion about the FDA regulations. It read to me that he had started the process of filing some applications on some of his products, but the FDA didn't know what they wanted. The FDA tried to target bubblegum-flavored vape juice. They hit us because they totally forgot that pipe tobacco existed. Not a word about pipe tobacco in the entire 2022 FDA plan. The result was that the FDA asked for more information because they had zero guidance.

Jeremy then created and sold a bunch of non-compliant special projects with no hassle. He paid some lawyers, made some estimates, and crafted some business plans to chart a course for his company's future. Then, a giant corporation swooped in and took all of his problems away, along with his job and his entire company. And then, the giant corporation just threw it all away because the bean counters said to.

The Halberg family has other interests besides the tobacco business. The BOD didn't ignore their interests, the family wanted to be out of what they considered a less desirable business.

Look at the facts. When STG bought Lane they paid well over $200,000,000 for it, in the process getting control of the most popular and profitable blends on the market. Go forward a little more than a decade and they paid $78,000,000 for MacBaren. See a trend? Tobacco sales have been trending downward an average of 10% a year since the 1960's.

The FDA had been fighting a number of lawsuits by anti smoking groups that wanted NO path to post February 15th, 2007 blends being allowed to be sold or new blends to be offered through either Deeming or Substantial Equivalency. For fans of the Dunhill/Peterson blends that would have guaranteed their extinction since they were out of the US market for about a year between 2009 and 2010, IIRC. That legal battle appears to be over, so the FDA is now getting back to the Deeming business.

In his longer interview Leonard Worzel agrees that there may be a growing number of pipe smokers, but that doesn't translate to more $$$$ because they tend to smoke a lot less than us geezers.

For the vast majority of the estimated 1 to 1.2 million pipe smokers in the US, their favorite blends, Captain Black and 1Q will be available and none of this affects them. The result of STG's culling of the Sutliff catalog underscores what pipe tobacco industry people have been saying forever, namely that 90% of sales are of aromatics.

While I have no way of knowing for sure, published run numbers for finer tobaccos, such as McClelland run numbers I've seen, suggest that ours is a very niche market within a niche market, like 4 to 5 % of pipe smokers. That's not a large population.

Companies, especially publicly owned companies, are supposed to be profit making entities, not charities. So no surprise that they are looking to maximize ROI, and that means a focus on mass market products.

 

[Zamora]

Some food for the discussion:

This is the five year market cap for STG

View attachment 364463

Here are their American codger blends:

Scandinavian (STG) Archives

STG Tobacco has a blend perfect for every smoker. All of their blends are smooth and made of the highest quality tobacco. Try some today.

boswellpipes.com

That pretty well leaves Middleton (subsidiary of Altria) as their only large (sort of) competitor for codger blends,,,in tubs only.

Middleton Pipe Tobacco ~ Middleton Carter Hall and Prince Albert Pipe Tobacco Blends are Available at Milan Tobacconists

Milan Tobacconists offers Middleton Carter Hall and Prince Albert Pipe Tobacco. Providing superior customer service and quality tobacco products since 1912. Shop our site now!

www.milantobacco.com

When you go out with your pipe and your tobacco gets low, go try and find a pouch of tobacco the same way you might buy a package of cigarettes or can of dip or pouch of chew.

STG sells all the 1 1/2 ounce packages of Captain Black and Half and Half, and Velvet,,,,if it’s in stock.

Remember the Econ 101 lectures on the buggy whip manufacturers?

It’s happening to pipe tobacco.

By the way, I love Squadron Leader, and other Gawith blends in those little cans.

Perfect for scattering around my milk barn and in Spout Spring Hollow for my descendants to find.

Yeah the near monopoly on blends STG has is even nearer with codger blends. I don't even know what Middleton makes besides PA and CH

 

[Zamora]

The Halberg family has other interests besides the tobacco business. The BOD didn't ignore their interests, the family wanted to be out of what they considered a less desirable business.

Look at the facts. When STG bought Lane they paid well over $200,000,000 for it, in the process getting control of the most popular and profitable blends on the market. Go forward a little more than a decade and they paid $78,000,000 for MacBaren. See a trend? Tobacco sales have been trending downward an average of 10% a year since the 1960's.

The FDA had been fighting a number of lawsuits by anti smoking groups that wanted NO path to post February 15th, 2007 blends being allowed to be sold or new blends to be offered through either Deeming or Substantial Equivalency. For fans of the Dunhill/Peterson blends that would have guaranteed their extinction since they were out of the US market for about a year between 2009 and 2010, IIRC. That legal battle appears to be over, so the FDA is now getting back to the Deeming business.

In his longer interview Leonard Worzel agrees that there may be a growing number of pipe smokers, but that doesn't translate to more $$$$ because they tend to smoke a lot less than us geezers.

For the vast majority of the estimated 1 to 1.2 million pipe smokers in the US, their favorite blends, Captain Black and 1Q will be available and none of this affects them. The result of STG's culling of the Sutliff catalog underscores what pipe tobacco industry people have been saying forever, namely that 90% of sales are of aromatics.

While I have no way of knowing for sure, published run numbers for finer tobaccos, such as McClelland run numbers I've seen, suggest that ours is a very niche market within a niche market, like 4 to 5 % of pipe smokers. That's not a large population.

Companies, especially publicly owned companies, are supposed to be profit making entities, not charities. So no surprise that they are looking to maximize ROI, and that means a focus on mass market products.

And us 5% have our spending spread out much further than the guy who just buys a pound of 1Q, smokes it up, then buys another rinse and repeat. I currently have stuff produced by maybe four or five companies

 

[NookersTheCat]

Yeah the near monopoly on blends STG has is even nearer with codger blends. I don't even know what Middleton makes besides PA and CH

Black & Milds... that is now the majority of their "business" (because really it's just a brand for Altria)
Ofc they used to have Cherry, Walnut, Sugar Barrel, etc. etc. But for now (since they moved their factory to DR) they kept only the PA and CH tubs because they were/are like 2 of the longest selling/only original codger blends left, but I would not be surprised to wake up one day and see them both gone. At this point Black & Milds are I'm sure where 90% or more of the money comes from.

 

[sablebrush52]

And us 5% have our spending spread out much further than the guy who just buys a pound of 1Q, smokes it up, then buys another rinse and repeat. I currently have stuff produced by maybe four or five companies

Yeah, I get it. Keep supporting those tobacconists, like Watch City or Wilke, who are still able to provide quality blends and variety. They are likely well supplied with blending components for a while, so no panic. You can always panic later.

 

[HawkeyeLinus]

Yeah, I get it. Keep supporting those tobacconists, like Watch City or Wilke, who are still able to provide quality blends and variety. They are likely well supplied with blending components for a while, so no panic. You can always panic later.

Or never!

 

[sablebrush52]

Yeah the near monopoly on blends STG has is even nearer with codger blends. I don't even know what Middleton makes besides PA and CH

Middleton Cherry is back. Of course, Middleton Cherry used to be the punchline for a rueful joke.

 

[NookersTheCat]

Middleton Cherry is back. Of course, Middleton Cherry used to be the punchline for a rueful joke.

It's back?!? Can you divulge where, I've only ever seen the cigars still being sold... I'm blessed with a solid supply of old but I'd buy more