Seeking More Knowledge About Cost Differences to Make Blends

[Briar Lee]

I just watched some YouTube videos on all the different types of tobacco and the many ways it’s cured. While cultivating and harvesting tobacco has changed over the years, there are still the same end products of types and grades available to blenders, as ever.

Online you can still buy $10 a pound cheap tobacco, the premium value bags are about $16 a pound, premium bulk tobaccos are $35 to $50 a pound, and some of the higher end name brands are $6 or so an ounce, or nearly $100 a pound.

With this talk of increasing taxes to $50 a pound for all pipe tobaccos, I just bought 8 12 ounce bags, or 6 pounds, of the premium value brands. It came to just over $100.

The tax on that might go up to $300, instead of less than $18.

What cost difference is there, to the makers for the leaf, is there between $10 a pound and $100 tobacco blends?

And how much more flavorings can account for the huge price difference?

Smoker’s Pride bags taste good, to me, at just over $1 an ounce. Not quite as good as the blends that cost $2, and the $4 and $6 an ounce blends are a little better yet.

I’m wondering the cost difference, to the manufacturers of the blends.

Any thoughts would be appreciated.

 

[karam]

It’s a good question, and one I’ve thought about myself.
My gut feeling is that the margins for manufacturers must be fairly decent for pipe tobacco, that if they could sell it for more they would (ie look at cigars, especially Cubans, there’s no way they cost as much as they sell for, yet they do sell).
Look at Perique, an expensive, time consuming, labour intensive process, made in the US by US workers, whole leaf going for 60$ a pound or so, or Latakia (Wolfway, a Greek manufacturer told me they get Latakia at 40 euros a kilo, their main Lat blend with 30% Lat sold for 23 euros per 150g, so the Lat in it cost 2 euros wholesale), yet the end product is very cheap compared with other forms of tobacco.

It’s puzzling that a flake that occupies a machine like a press for a day, or needs to sit in a warehouse for 6 months, sells the same for a ribbon that just needs to be pressed once and then cut. Or something with loads of Perique selling for the same as something without.

There are a lot of tax steps between the farm and opening a tin, and a lot of margins, yet we get some fantastic products at low prices, let’s be happy about it and wish pipe tobacco manufacturers all the best!

 

[Briar Lee]

The $10 a pound grade tobaccos are also sold in individual one ounce packs, here in Missouri for a dollar.

That tobacco makes mild, good cigarettes but it’s bland tasting in a pipe.

I’ve read where average average auction prices are about $2 a pound for either Burley or Bright.

The current tax on pipe tobacco is $2,88 a pound, and retailer doesn’t loose money. There isn’t over 100% markup between the five bucks a pound taxes and raw leaf price used to make $10 a pound tobacco.

At just over one dollar an ounce, the premium value brands start and those are clearly better and tastier in your pipe, at least in my opinion. But they are also cavendish process tobaccos, which means about half the weight of the bag is water, alcohol and sugars.

But when you look at Smoker’s Pride or the other premium value brands, there several different kinds of leaf used. No $60 a pound Latakia or Perique, but a better and more expensive grade. And perhaps it’s aged longer, too.

Then for $2 to $4 an ounce there are pages and pages of premium bulk tobaccos for sale online. Those tobacco blends are better, but not twice or four times better, than the dollar an ounce bagged blends.

The cheaper brands of OTC tobacco range from $3 for Prince Albert to $9 for Borkum Riff, here in Missouri.

A $50 a pound tax would set about $5 per 1 1/2 ounce package tax.

It will be (and already is) a regressive tax where $1 an ounce tobacco is slammed at three times what it costs, and $6 an ounce tobacco at only half what it costs.

I just wonder how much it costs now, to justify the enormous range of prices.

 

[tobefrank]

I have not got a clue on manufacturing costs, but I can tell you that with sufficient tax the cost difference between a budget blend and a luxury blend completely disappears.

50 grams of Captain Black is exactly the same price as Samual Gawith Full Virginia Plug here in Australia. Both about USD $100 per 50g. I assume part of the lack of difference in price is that the FVP was probably bought in bulk and sold in a pouch instead of a tin. Even so, a tin of Erinmore Flake is the same price as a tin of Captain Black.

 

[Ahi Ka]

@Briar Lee have you tried any of the daughters and Ryan range?

 

[jpberg]

So smokers pride is a better and longer aged blend than something with Latakia or perique?

 

[hauntedmyst]

So smokers pride is a better and longer aged blend than something with Latakia or perique?

I dont think its aged at all. Ok, maybe some but like no more than 20 minutes. Think of it as the Budweiser of smokes, good for what it is but by no means gourmet.

@Briar Lee have you tried any of the daughters and Ryan range?

D&R has some great blends that just happen to be value! I've been digging Ramback lately.

 

[Briar Lee]

So smokers pride is a better and longer aged blend than something with Latakia or perique?

No, aged longer compared with $10 a pound tobacco. Sorry for any misunderstanding, my bad.

My son smokes Gambler’s Gold and uses a hand roller to make cigarettes. It’s now $12 per pound, or 75 cents an ounce.

There are even still cheaper tobaccos, at $10 a pound or 63 cents an ounce.

You can smoke those cheap tobaccos in a pipe but it’s bland, and burns hot unless you are careful to sip them. Yet they make delicious cigarettes.

Smoker’s Pride is about $14 for a 12 ounce bag but online you can combine purchases and get 12 ounces of Smoker’s Pride and 12 ounces of Super Value for about $24, or $1 an ounce. They are “real” Pipe tobaccos. They make lousy cigarettes.

I have in my office a bag of Smoker’s Pride Cherry Cavendish, 8 ounces of Lane TK-6, and a can of Cult Red Moon, all three Lane products.

The same blender makes three products that retail for $1, $2, and $6 an ounce.

All three are delicious cherry cavendish type aromatics. If I had to smoke them blindfolded and tell the difference it would be hard, at least for me. Yet in normal smoking I seem to think I like the $6 an ounce blend a little, tiny bit better than the $2 blend and the same applies to the $1 blend. It’s not much difference, all three are excellent tobacco blends.

Premium cigars are taxed at a percentage of value, but not more than X.

A $50 a pound flat tax is going to hurt the $10 a pound tobaccos many times more than a $50 a pound tax on $100 a pound tobaccos.

As my son tells me, 8 pounds of Gambler will roll about 5,000 standard cigarettes, for $120, and the papers cost $60.

That’s about 60 cents a pack. The tax on a pack now at the federal level is a dollar.

My clients that smoked marijuana tell me that the good stuff sold at dispensaries is maybe $90 an ounce, and the bootleg product is considerably less.

But they also claim medical grade weed is incredibly better, to get them high.

I ask them about the taste difference, and they look at me like I’m an old square pipe smoking old man, and say who cares?

In some states they can grow their own weed for next to nothing. They prefer the $90 an ounce weed.

The tobacco makers have been in business for hundreds of years, and I’d say Lane, Sutliff, Altria, and R J Reynolds have it all down to a science by now.

I hope we don’t find out what a $50 a pound tax does to pipe tobacco selections.

I’d say the only grade they’ll sell will be the very best.