CIGARS IN THE PHILLIPINES
The Philippines' people have made a success of one of the country's oldest continuous industries, that of tobacco cultivation. As it was in many Spanish colonies of the 16th to 19th centuries, tobacco was introduced in the Philippines from the New World early on. It was Magellan, in fact, who first brought tobacco to the islands, from his explorations in the Caribbean. The leaf quickly achieved popularity with the local populace, gaining entrance even to areas that the Spanish were unable to penetrate, most notably the largely Islamic island of Mindanao (whose leader at the time, Lapu-Lapu, expressed his opinion of the Spanish by relieving the itinerant Magellan of the rest of his life). And, like in other Spanish colonies, tobacco knowledge and skill passed easily through the Philippines as part of the international trade routes that the islands anchored.
It was the involvement of two families, however, that nearly suffocated a strong and vibrant tobacco industry in the Philippines. The Hapsburgs and the Bourbons (who are remembered for a sweeping empire and a delightful beverage, respectively), as ruling families of Spain, were the originators of the Spanish government's tobacco monopoly, officially extended to the Philippines in the late 1700s. What had once been a booming business of international trade throughout Asia and Europe became severely restricted by the Spanish Crown. The monopoly generated such animosity among the locals, who almost universally used tobacco in one form or another, that the Catholic church was called upon to exert influence and encourage obeisance to the whims of the monarchy. Tobacco rose to such a prominent position in the mind of the Spanish Crown with respect to the Philippines that it may have encouraged Spain to attempt to hold on to the colony much longer than was financially advisable.
What brought about the end of the Spanish tobacco monopoly in the Philippines may have been the demand for the tobacco itself. Smuggling of the high-quality Philippine produce was commonplace, as demand for quality tobacco rose throughout Asia and Europe. State-produced cigars became too expensive for the locals, and tobacco was diverted to illegal production for the local market. In some areas, cigars were so valuable as to be used in place of currency. In the face of a crumbling system of support and enforcement, the tobacco monopoly was officially abolished in 1881. As the ink was drying on the decree, a new Spanish company entered the Philippines, establishing La Compania General de Tobaccos de Filipinas. The first factory opened by this company, La Flor de la Isabela, is still the leader of cigar production on the Philippines.
Named for a tobacco growing region in which La Compania had farms, La Flor de la Isabela operated for the next 100 years as part of what was effectively a private monopoly of the tobacco industry in the Philippines. La Flor suffered through the late 1980s and early '90s, mainly from a faltering reputation and narrowing market penetration. In 1995 a drastic change was made, with the goal to resurrect a company with an unbelievably strong tradition. Two Asian businessmen, local Roberto Ongoing and Hong Kong-based Robert Kuok, purchased 50 percent ownership of La Flor and assumed control of the business. Kuok - recently named by Forbes magazine as the shrewdest businessman in the world - and Ongoing are both prominent players in the Asian business community, and they have no intention of letting the Philippine cigar industry falter in the face of a global boom.
(excerpted from Smoke magazine)
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