What Factors Influence the Price of Cigars?

At the most basic level, cigars are a collection of rolled, dried and fermented leaves. How then do they become so expensive?  

Like any other product, many factors influence the price of cigars. Those factors include their rich history, contemporary supply and demand, craftsmanship and taxation.

Let’s start with history.

According to history books, when Christopher Columbus was welcomed by the Native Americans, he was given gifts of local produce, fruits, food and some mysterious dried leaves that, though not edible, were treated as precious gifts.  During that time, it was popularly grown in Central America, Caribbean islands including Cuba, the Dominican Republic, Haiti, Honduras, Mexico, Ecuador, Nicaragua, Guatemala, Panama and Puerto Rico.  Since then, production has spread across the Eastern United States, Italy, Spain, Indonesia and the Philippines. Although the exact period in which tobacco began being cultivated is unknown, an unearthed Guatemalan ceramic pot housing a well-preserved rolled tobacco was dated at more than 600 years old.

As the production of tobacco has developed it has split into fast-moving, mass-produced products whilst cigars have preserved the craftsmanship and ceremonial qualities of their histories. Often hand-rolled and frequently produced in small batches, cigars are typically overseen with the artisanal care associated with a fine wine or whisky.

Supply and Demand

Although some connoisseurs have other regional preferences, Cuban cigars still maintain bragging rights with the perfect environmental and ecological factors as well as a proud tradition of arcane knowledge passed down through families and cultures. Trade restrictions between Cuba and the US certainly had an inhibiting factor on the growth of the industry and complicated the supply chain. Producers unable to build a market with their nearest trading partner often fled to other regions, including the Dominican Republic, now a powerhouse producing region in its own right.


Many of the best cigars are still produced in small batches and with traditional methods. These include hand-picking, hand-rolling and sometimes employing drying and fermenting processes measured in years.

As demand for cigars continues to increase, there is a growing industry aiming to mass produce good quality cigars at prices that feel accessible to the average smoker. Nevertheless, taxation and the general cost of importation to our relatively remote island nation maintain a minimum price on products that can’t be avoided.

For cigar fans, aficionados and collectors, taxation and import costs pale in comparison to the rest of the investment. Premium cigars retail for as much as $5k for a single smoke. Perhaps not an every day indulgence, for the real connoisseur these premium cigars are infused with rare flavours, customised to the customer’s liking and generally finished with immaculate details such as personalised foils.


Alexanders Cigar Merchants
517 Toorak Road
Toorak VIC 3142 Australia

Trading Hours
Monday to Friday - 10.00am to 6.00pm
Saturday - 10.00am to 5.00pm