James Leavey's Corner
Heinrich Villiger – In Love With Cigars

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HeinrichVilliger –  in love with cigars

by James Leavey, editor, The FOREST Guide to Smoking in London
and The FOREST Guide to Smoking in Scotland

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James Leavey

Heinrich Villigeris the trim, fit, sole owner of one of Switzerland's last surviving tobaccofamily businesses; his world famous company was founded by  his grandfather,Jean Villiger, in Pfeffikon, a small town on the northern outskirts ofLucerne, in 1888.     A soft-spoken diplomat, Heinrichhas been producing, selling and extolling the virtues of fine cigars,cigarillos and loose tobacco for over half a century. 

For a man whotried his first cigar when he was about 12,  then smoked cigarettes until hewas 23 when he switched to premium cigars – which he still enjoys everyday,  Heinrich Villiger looks far younger than his75 years.  Early every morning, he rides one of his namesake mountainbicycles on the quiet roads around his Swiss farm for 30-40 minutes beforedriving across the border to his office in Walshut-Tiengen, Germany. Ratherlike his famous brand of bicycles, and even more famous brand of qualitycigars and cigarillos, Heinrich Villiger looks like a man who could go onforever.

And, indeed, manyof us hope he will, for Heinrich Villiger, chairman of the board of Villiger Soehne Holding AG,  is a gifted entrepeneur, and one of the mostinfluential personalities in the global cigar market.

In order to run acigar factory successfully, his grandfather, Jean, not only had tospecialise in everything there was to know about tobacco; he also had toacquire certain manual skills concerned with the art of cigar manufacture.As a result, the Villiger family, right up to the present day, hasconcentrated on acquiring and updating knowledge of the origin,characteristics and markets for tobacco as well as for the products madefrom it.

When Jean died in1902 at the age of 42, his widow, Louise, continued to run the young companyand founded a subsidiary in Waldshut-Tiengen eight years later.  She hadrecognised that the market in neighbouring Germanyoffered greater opportunities, and foresaw that Swiss quality cigars wouldbecome an international success.

In 1918,  hersons, Hans and Max Villiger, took over the company and developed it into oneof Europe's main tobacco manufacturers.

The success ofVilliger can be traced back to its founder's product innovations, whichincluded Villiger-Kiel, a cigar with a goose quill mouthpiece, and Rio 6,the packaging of which fitted snugly into the bullet pouch that Swisssoldiers carried on their belt. And then came the ubiquitous VilligerExport, a short machine-made cigar, individually wrapped in tissue paper,which became the 'Havana of the ordinary people.' Today, Villiger is themost frequently smoked cigar in Switzerland and the most commonlyencountered of all Swiss brands around the world.

In 1966, Heinrichand Kaspar (who is 11 years younger than his brother) took over the companyfrom Max Villiger and, after a few years, sold their shares in its cigarettefactory to concentrate on cigars and roll-your-own tobacco and pipe tobacco.

After Kaspar'sdecision in 1989 to dedicate himself to full-time national politics (he wasPresident of Switzerland in 1995 and 2002), Heinrich became the sole ownerof the Villiger group, after buying his brother's shares. 

Later that year, Heinrich set up his first joint-ventures - with5th Avenue Products Trading GmbH in Germany and Intertabak AG  inSwitzerland.   Both companies are joint ventures with Habanos SA and are theexclusive importers and distributors of Havanas inGermany and Switzerland. The Villiger group is now among the top importersof Cuban raw tobaccos for cigar production and was the first companyexclusively licensed to produce the mini-versions of the famous Cubanbrands, San Luis Rey and Romeo y Julieta. 

In 1998, Heinrichfounded El Mundo del Tabacco-Import GmbH for the import of non-Cuban premiumcigars.  One year later, P.T. Villiger Indonesia was also set up, a 100 percent owned subsidiary.  In 2002,  Heinrich soldhis famous Villiger bicycle company (he's got the ten remaining Villigerbikes in his double garage at home for family use), and decided toconcentrate on the production and distribution of tobacco products.  He thenpromptly set up Villiger North America, in Miami.

Today, Villigeris the second largest cigar company in Switzerland and the third largest inGermany, as well as the number one exporter in both countries. The company'shead office is still in Pfeffikon, and it also has factories in Germany,Ireland and Indonesia.  Currently, it employs about 900 people, worldwide,and distributes its trademark cigars and cigarillos to over 95 countries.

On 1 April 2005, Heinrich announced that Michael Beck, 54, theformer president of Interbrew Germany, the second largest German group ofbreweries, would take over as  CEO of Villiger Sohne AG. 

“It was time tohand the business over to somebody else,” said Heinrich Villiger, “and I'mvery happy that Michael Beck has taken over.  But I wanted to make a smoothtransition, and gave Michael my old office, while I moved upstairs. Michaelwill now be looking after all the Villiger products, and I shall be going onwith the joint venture we have with Habanos in Switzerland and Germany.  Wehave a good team.”

Heinrich alsoremains as president of the board of directors and, not least, companyadviser, for he is renowned for his integrity – a family trademark – and haslong been one of the key champions of tobacco in Europe.

“Thesocio-political argument between smokers and nonsmokers must be brought upfor discussion", he said. “A smokeless society and the abolition of anentire branch of industry and the centuries-old culture and history of thetobacco are the goal of the anti-tobacco campaigns. Meanwhile, theself-determination of the enlightened consumer and the free expression ofopinion of the entrepreneur are being ignored.  It is an attack on personalliberty.”

Heinrich Villigerhas been chairman of the European Cigars Manufacturing Association and a keymember of other trade associations for many years and has been goingbackwards and forwards to Brussels to discuss all aspects of tobaccolegislation, as well as appearing on several TV and radio programmes todiscuss the bans on smoking in public`.  He usually refers anti-smokingcritics to the central differences between cigars and cigarettes. “The cigaris a luxury and not a  mass consumption article", he said. “Besides, thehealth endangerment of the cigar smoker is widely disputed and cannotaccordingly be made valid.”

When Heinrichjoined his family business at the age of 21,  there were hundreds of cigar factories in Germany. “Now there are only about five multinational companieswho control the world market for cigars –  all those middle-sized factoriesof the mid-20th century have disappeared,” said Heinrich, whose company iscurrently holding the number 10 position. In Switzerland, Dannemann has amarket share of about 60 per cent; Villiger, 40 per cent.

Meanwhile,Villiger confirmed that machine-made and premium cigars are going up inNorth America.  “We're wondering where people are now smoking cigars,” hesaid.  “With all the smoking bans, we think that smoking cigars will becomea seasonal pastime, i.e. people will smoke outside in spring and summer, andnot smoke in the winter when they're stuck indoors. 

“There willprobably be more sales in the summer than in the winter. When Italyintroduced its ban on public smoking last January, cigar sales dropped byabout 35 per cent.   Four months later, we're seeing those sales slowly growagain.

“It's a verycomplex situation for the cigar industry.  You can kill this industry if youincrease taxes, but if you increase taxes, people smoke less and therevenues go down.  Last year, Germany increased its cigarette taxconsiderably – by the end of 2004 they lost almost 800 million Euros intaxes.  I believe there's a limit – they cannot afford to increase tobaccotax up to 100 per cent.

In America, wheretwo-thirds of the world's premium cigars are consumed, tobacco  taxes arecollected by the State.  Where they've introduced bans to discourage peoplesmoking they don't have enough tax anymore and they need the money.

“What ourindustry needs is a good spectrum of cigar retailers.  Hunters and Frankaustarted all this with their Havana specialists, and we are following theirexample.    I think we should be supporting the specialist tobacco retailtrade.  But they must prove to their customers that they are experts and anauthority on smoking...and we're talking about premium cigars because ifyou're only selling cigarettes it's like selling newspapers.  And of coursethat retailer must have a good margin for if he doesn't he'll have nointerest in selling our products. 

“The Chinese havestarted smoking cigars but they cannot afford premium cigars, but they canstill afford a small cigar such as a Villiger Premium.  We are increasingour exports to the Far East, Japan, to Malaysia, and the UAE – people thereare smoking less but smoking better.

HeinrichVilliger's wife, Martina, is a member of the Burger family which ownsDannemann, and she and Heinrich have three daughters and a son.  Theireldest daughter, Corinna, a medical doctor, has agreed to eventually takeover from her father, to keep the business in the family.

“If Villiger hadbeen a cigarette company, Corinna wouldn't have agreed, but as she said, 'Iknow that smoking cigars has no effect on health.'

“Sometime in thenear future, perhaps in ten years' time, there will be more important thingsfor the word's governments to concentrate on, such as feeding the millionsof people who are starving every day.  Compared to those major problems,bans on smoking, fast food and alcohol will seem very minor.”


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