A pioneer’s progress

These are the words of Mohamed Zeidan, Chairman of the Phoenicia Group of Companies, about the founding of his cigar supply and distribution business in Lebanon in 1979. The 40th anniversary of partnership with the Cuban cigar business through Cubatabaco and Habanos was due to be celebrated in November 2019, but postponed. Finally, on 23 June, the group hosted a sumptuous evening that blended the physical and the virtual to mark the occasion. Click here for full details of the evening. Phoenicia today is best known as one of the world’s leading distributor of Cuban cigars, with a business that spans the Middle East, Africa and Europe. Through Phoenicia-Aer Rianta Company it also runs Beirut Duty Free, and within it travel retail’s most acclaimed – and spectacular – cigar area, featuring the world’s first airport duty free La Casa del Habano shop, at Beirut Rafic Hariri International Airport. Phoenicia’s highly successful premium cigar concept continues to be exported to other markets, through long-time partner ARI, but also in alliance with other retailers. Through its owned businesses and strategic partnerships, Phoenicia is active not only in cigar distribution and duty free, but also tourism, food and real estate, with Phoenicia International the Lebanese holding company created in 2004 to handle its diverse activities. Mohamed Zeidan says his business philosophy is based on putting himself “in the shoes of the consumer”, allied to his passion for luxury and cigars. Investing in technology and recognising the potential of people, he adds, are the cornerstones of his approach. He says: “In the end, it is professionals with potential and leading partners who can best sail the pioneering seas of business with me.” As the company marks 40 years in the cigar business, The Moodie Davitt Report is proud to have been asked to help tell the Phoenicia story, through our recent coverage of the anniversary celebrations and in this interview with Mohamed Zeidan.

The Moodie Davitt Report: Mr. Zeidan, tell us please about the significance of the 40th anniversary for you, your family and your company?

Mohamad Zeidan: It’s an opportunity to remember the 40 years of business with Cuba and how it started, how it evolved, and where we are today, This anniversary gives me, my family and my company the momentum to continue our business relationship for another generation.

How did this partnership begin and how would you characterise your relationship with Habanos and its leadership teams?

It began in 1979 when Phoenicia was a customer of Habanos, which later became a distributor and then a partner. Today we are one of the world’s biggest distributors of Cuban cigars, with business well beyond Lebanon and across the region. During these 40 years we have had different Presidents of Cubatabaco and then Habanos, and our personal and business relationship evolved very well with each. There was no need to sign a contract in those early days; a shake of the hand was enough. We later became much bigger and more significant as a partner and today one of Habanos’ main distributors worldwide. When you say ‘Zeidan’ in Lebanon, it is like saying ‘cigar’, The association and trust is extraordinarily strong between our companies. We are open to deepening and evolving our business relationship all the time.

How have you seen consumer tastes and habits change through the years?

Everything is subject to changes in consumers’ tastes. As for cigars, the demand in our area changes according to the size of the cigar, its length and the capa (wrapper or outer leaf) used. Twenty years ago, the most demanded and famous sizes were the Churchill and Double Corona, but now the trend is for thicker cigars of a ring gauge of 50+. As for the capa, aficionados used to be more towards the colorado capa, now they are towards colorado oscuro and even maduro capa.

Please tell us what the 40th anniversary celebration with Habanos and other partners on 23 June meant to you?

Celebrating the company’s 40th anniversary brings us back 40 years and reminds us of our cooperation with the Habanos team that went through the years in Cuba, a cooperation that continues and always will. Also, having the two Co-Presidents and two Vice-Presidents of Habanos be a part of our event, presenting our new launches and talking about our businesses relations, truly touched me. It shows how Cuba and its people and culture, are loyal to their friends and appreciate the hard work of their partners.

What has been the impact of the COVID-19 crisis on your business, and how has Phoenicia reacted?

Naturally, the whole world was affected by this pandemic. Our sales decreased by -70% compared to 2019. Now, with the receding of the epidemic wave, it has begun to improve and we are waiting until the end of 2021 to even hope to be able to return to what we were in 2019 in the coming years. We have adapted to this problem, knowing that we were less affected than others in the world because we are accustomed to working under the most difficult circumstances. We live in a region where there are permanent fluctuations and force majeure that forces us to adapt to the new conditions imposed on us. Therefore, we are always ready to work under any circumstances or fluctuations that may occur.

What are the next steps towards recovery and to growing the business once more?

After airports return to normal worldwide, we will return with a new momentum. The focus will be on cigar lovers whose hobby is to buy a collection of Cuban cigars when passing through the world’s airports, the same as for those who collect watches.

The travel retail business has been hit hard by the crisis. Does your vision to elevate cigar retailing at airports remain constant?

Of course, the business was difficult because the number of passengers dropped a lot, and airports were closed around the globe. When it comes to cigars, retail at Beirut Airport is very important and useful, due to the high taxation of tobacco in the local market in our area, so it definitely deserves attention and development.

What are your business principles and values? What does a good partnership look like?

If you are transparent and act correctly, where your word is your bond, you can do good business with your partners. That is how we have proceeded with Habanos for 40 years. Also, you need a team that loves what it does every day. If you have this, you can succeed.

How do you plan to keep Phoenicia thriving and growing into the next generation?

We have a diversified business. Some of these operations will involve partnerships or joint ventures with other strong companies. We are examining how we partner in future to secure the continuity of the business. My hope is that my family, who are already involved, will continue to grow, and expand our business.