04/29/2025
An Open Letter to Our Customers
This is the letter I sent to our team today regarding price increases related to the new tariffs on Nicaragua imports. I am sharing it here so that all of our stakeholders see the same message I shared internally.
Team
As everyone is aware, our costs from the factory have increased 10% due to the Trump Administration's IEEPA - Reciprocal 10% Tariffs.
I have attached a copy of our new price sheet. The plan is to have these price changes take effect in May. All orders taken prior to the price changes will be honored at the price as of the date the order was placed.
As the tariffs are assessed on our import price, and not on our wholesale price, the impact varies based on how much margin we have built into our wholesale prices. In most cases we are absorbing some of the tariffs and not passing them on to the retailer knowing that the retailer will keystone any increase we pass onto them doubling the impact on our consumers.
We do not foresee any relief in the administration's Nicaragua tariff policy on the horizon. If anything, the risk is that it returns to 18%, or higher, after the 90 day hiatus ends. As you are aware, we import every 10 days. We do not keep a lot of inventory. We aren't able to absorb the tariffs for more than a month, or so, before these pricing changes take effect.
Discuss these pending changes with our retail partners. Review the increase by brand. You will note that in most cases it is less than 5%. In almost all cases, it is less than 10%. Given our more generous margins on LEs, these are generally affected the least. Given our very tight margins on Maestranza, this brand is affected the most severely.
Should the unlikely reversal of the tariffs occur, we will not reduce our prices as this would only devalue our retailer's inventory. It would delay any future price increase and could possibly allow us to do more in terms of discounts and free goods to support our retailer's ability to drive sales of our brands.
It goes without saying, but our brands remain very competitively priced despite these increases. RoMa Craft Tobac has always been and remains one of the best values in the premium cigar market when comparing to prices of products of similar quality in the market.
Continue to focus on closing April strong and ensuring that our retail partners have orders in for the items they will need over the next few months. This will give us, and them, a few more days to get orders in before the price increases take effect.
Skip
