Is Tabacalera de Garcia, which employs 2,000 people in the Dominican Republic, likely to close due to US sanctions against the Cambodian businessman?

 

The Dominican Republic’s Tabacalera de Garcia, the world’s largest cigar factory, can no longer sell its cigars in the United States due to sanctions imposed by US authorities against Cambodian businessman Chen Zhi, accused of massive cyber fraud, reveals the American blog halfwheel in a lengthy investigation.

Following Chen Zhi’s indictment and the freezing of some of his assets, Altadis USA, the American subsidiary of the Madrid-based Tabacalera group, can no longer purchase cigars from Tabacalera de Garcia or the Flor de Copán factory (Honduras), which produce most of the non-Cuban versions of Montecristo, Romeo y Julieta, H. Upmann, and Trinidad sold in the United States.

The sale of Imperial Brands’ premium cigar activities in 2019-2020 to “a consortium of Asian investors” involved not only 50% of Habanos SA but also these two factories which together produce more than 55 million pieces per year, a very large part of which is sold in the United States, the world’s leading market for handmade cigars.

La Tabacalera de Garcia, located in La Romana (southern Dominican Republic), notably produces the American versions of Montecristo and Romeo y Julieta

Tabacalera de Garcia claims an annual production of 40 million cigars, “23 million of which are for the United States,” as detailed last year by its General Manager, Ricardo Nieto, in L’Amateur de Cigare Magazine. The Flor de Copán factory produces approximately 15 million cigars per year, more than 50% of which are sold in the United States (see L’Amateur de Cigare English edition #22), notably under the Henry Clay brand.

“[Altadis U.S.A.’s] importation of cigars from two international manufacturing partners has been impacted by US sanctions imposed on the owners of these partners,” said Javier Estades Saez, president of Tabacalera USA, parent company of Altadis USA, in a statement to halfwheel. “Importantly, Altadis USA itself is not subject to any sanctions. Following the imposition of sanctions, we acted promptly to pause all business with these partners, as required under U.S. law.”

“Operational blockage”

“To maintain continuity, production is being shifted to existing manufacturing partners within our established network. These are long-standing partners, and this transition is already underway and moving quickly, said Estades. “As a result, and to be clear: we anticipate no inventory issues with our brands in 2026.”

These “existing manufacturing partners” are not named, but Altadis USA has regularly used external manufacturers such as AJ Fernandez and Plasencia Cigars, both located in Nicaragua.

Ricardo Nieto, General Manager of Tabacalera de Garcia

“Because of the operational blockage in the United States, Tabacalera has been forced to temporarily adapt activity levels and employment related to exports to Tabacalera USA,” said the spokesperson for the Spanish company when asked by halfwheel about staffing changes at the factories. “The company is committed to making every effort to minimise this impact and to take the necessary operational decisions to restore normality as soon as possible.”

At the end of November, Procigar announced to participants of the 2026 festival that the visit to Tabacalera de Garcia was canceled. When questioned by L’Amateur de Cigare, Ricardo Nieto mentioned “construction work to improve the current facilities,” while another Tabacalera manager in Madrid referred to “renovation work” on a building inaugurated in 2022.

 

Photos: Tabacalera de Garcia in 2024 ©Luc Monnet