Mehari’s cigars present opportunity for independents in STG’s acquisition of Royal Agio

Scandinavian Tobacco Group (STG) has announced the acquisition of Royal Agio cigars from Netherlands-based Highlands Beheer B.V. for €210m (£180m).

The acquisition is subject to approval by the Competition and Markets Authority (CMA) in the UK, but is expected to be completed in the first half of 2020.

It will add Mehari’s, Panter and Balmoral cigars to Scandinavian Tobacco’s range, adding 2% to its UK market share.

STG country director Alastair Williams told Better Retailing that the main focus from the acquisition for convenience retailers will be Mehari’s Ecuador, Java and Red Orient.

Red Orient currently does not appear in the top 15 bestselling cigars in independent & symbol retailers but ranks at 11 from a total market perspective, above products such as Ritmeester Mini Moods and King Six. It ranks as the third bestselling Panatella (small cigar) in volume sales.

Ecuador is the 10^th bestselling Panatella and one of only four products in the segment that has increased its market share by volume over the past year to August 2019.

“The acquisition of Royal Agio helps us on our mission to become the undisputed global leader of cigars and will grow our total sales by 15%,” Williams said.

STG’s current range contains Signature, formerly Café Crème, Moments and Henri Wintermans.