Southern Draw Cigars has announced a $0.30 per cigar price increase across its entire portfolio, effective May 1, 2025. The company attributes this adjustment to the recently imposed 10% U.S. tariff on premium handmade cigars imported from Nicaragua, where Southern Draw manufactures its products.
In a statement shared via social media and a letter to retailers, Southern Draw expressed the necessity of the price increase due to the new tariff: “A day of sad reality as the reciprocal tariff of 10% on Nicaraguan imports must now be factored into our cost of goods.”
The tariff applies to the direct import price, which is neither the wholesale price that retailers pay nor the final price consumers see. As a result, the impact of the tariff is compounded by additional state tobacco and sales taxes, potentially leading to a more significant price increase for consumers.
Southern Draw also noted that it does not maintain excess inventory in its warehouse, meaning that orders leaving Nicaragua on or after April 30 are subject to the new tariff, and any orders placed from May 1 onward will reflect the updated pricing.
While Southern Draw is among the first to adjust prices in response to the tariffs, other cigar companies are taking varied approaches. Perdomo Cigars, for instance, announced a $0.50 per cigar increase across most of its portfolio, citing increased manufacturing costs as the primary reason .
Conversely, J.C. Newman Cigar Co. has not announced any price increases in response to the new tariffs. The company last adjusted its prices in January 2023, implementing a weighted average increase of 6.5% across its portfolio due to rising costs for tobacco, packaging, and labor.
The recent tariffs stem from the U.S. government’s decision to impose reciprocal tariffs on countries that have levied taxes on American goods. Initially set at 19% for Nicaraguan imports, the tariff was reduced to 10% following a 90-day suspension. However, industry experts warn that if the higher rate is reinstated, further price increases may be necessary.
