Sanctions: The Endgame for Cuba’s Cigars
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Operations have been at a standstill since September 4. 5th Avenue Products Trading in Waldshut-Tiengen in southwestern Germany, the official exclusive importer of Cuban cigars for Germany, Austria and Poland, has suspended deliveries, as the trade portal Cigars-Connect reported last week; provisional insolvency administration is now under way.
The reason has nothing to do with the business. Figures from the German company register show that the firm turned over just under 63.8 million euros in 2024 and generated an operating profit of 20.2 million — a glittering operating margin of 31.7 percent. Net profit came to 14.4 million.
What brought 5th Avenue down, at least for now, were frozen bank accounts.
Major Habanos Investor in Chinese Pretrial Detention
The company was founded by Heinrich Villiger, who died in the summer of 2025, shortly after his 95th birthday.
Until a year ago, the German subsidiary of his Villiger Söhne held 45 percent of 5th Avenue, the German exclusive importer. The last years of his life were overshadowed by an ugly conflict with his co-shareholder, whose principals sat in Havana and Cambodia (finews reported, article in German) — today one of them sits in China, in pretrial detention.
Corporación Habanos, the Cuban export monopoly from which 5th Avenue Products Trading sources its cigars, as does Intertabak, the exclusive Swiss importer in Pratteln, is half owned by the Cuban state. The other half is held, through two intermediate companies, by Madrid-based Allied Cigar Corporation. And behind that, through an opaque chain of BVI and Hong Kong vehicles, stands the luckless billionaire Chen Zhi.
Indicted in the US, Sanctioned by OFAC
On September 10, 2025, under massive pressure, Villiger’s heirs handed a quarter of the company to those co-owners. The split has read as follows ever since: 20 percent Villiger Söhne, 80 percent the Habanos empire.
The holdings run through an impressively layered international structure, see the separate data page:
(Graphic: finews; click opens the graphic in its own tab)
What no one suspected at the time: barely five weeks later, a US federal indictment would be unsealed that plunged the world of Cuban cigars into a deep crisis.
Stakes Bought From Imperial
The backstory begins in 2020. Imperial Brands, the London-listed cigarette group, divested its premium cigar business, including 50 percent of Corporación Habanos — the Cuban-Spanish joint venture that holds the worldwide monopoly on exports of all 27 brands made in Cuba, among them Cohiba, Montecristo, Partagás and Romeo y Julieta.
The buyer, for 1.04 billion euros, was Allied Cigar Corporation in Madrid, which had emerged from a shelf company called Eldorado Directorship, financed through a Hong Kong entity and held by a Cayman Islands fund. The investors remained anonymous, at least for the time being. Separately, Imperial sold the American distribution arm for a further 185 million to a second company, Gemstone Investment Holding.
Cyber-Scam Compounds, Money Laundering and Forced Labor?
Who stood behind Allied Cigar Corporation stayed in the dark for longer. In 2020, finews asked: «Who Are Cohiba’s Mystery Buyers?»
Only in October 2022 did Radio Free Asia reveal that the owner was Chen Zhi, founder of the Prince Group, born in Fujian, China. At the time he was sanctioned, he held Cambodian, Vanuatuan and Cypriot passports as well as one from St. Lucia.
His precise stake, 57.1 percent at the top of the structure, became known only through the US indictment. He is accused of running cyber-scam compounds in Southeast Asia, money laundering and forced labor; the authorities seized bitcoin worth roughly 15 billion dollars at the time. It is the largest forfeiture in the history of US justice.
A Multimillion Business in Cigars
The cigar business, too, is about serious money. Habanos publishes its revenue each year at the Festival del Habano, which finews last attended in February 2025: most recently 827 million dollars for 2024.
The profit resting on that revenue has been a closely guarded secret until now. The annual accounts of the holding companies filed in Madrid, which finews has reviewed, make it visible for the first time: Corporación Habanos earned a profit of 119.6 million euros in 2024 on equity of 523 million.
Around 87 percent of that year’s profit was distributed. Each of the two sides received 52.3 million euros — after 23.2 million in a weak previous year marked by the pandemic. Distribution is more profitable still. Altabana, the Madrid holding company in which both sides likewise hold half each, consolidated revenue of 586.9 million euros in 2024 and a profit of 174.1 million, considerably more than the export monopoly in Havana.
Chen Zhi at his extradition to China in January 2026. (Screenshot: CCTV)
2024: Almost 300 Million Euros in Profit
The 2024 accounts show that Altabana held the stakes in the country importers, worldwide: at the time 55 percent (today 80) of 5th Avenue in Waldshut, Germany, 50 percent of Intertabak in Pratteln, 50 percent each of Hunters & Frankau in London and of Pacific Cigar Company in Hong Kong (the largest regional trading house in the empire, covering all of Asia-Pacific), 60 percent of Diadema in Milan. Add to that Paris, Lisbon, Brussels, Amsterdam, Stockholm, Moscow, Buenos Aires, Toronto, Sofia, Andorra, Las Palmas and Santo Domingo — most of them wholly owned.
Taken together, the chain threw off almost 294 million euros in annual profit: around 120 million at the exporter in Havana, 174 million in country distribution. A good 113 million of that fell to each of the two joint venture sides, the remainder, 67 million euros, to the regional joint venture partners such as Villiger in Switzerland, Germany, Austria and Poland, or Tang Tobacco for Asia-Pacific, built up by Sir David Tang (1954-2017).
An Investment Straight From the Private Equity Playbook
What followed the 2020 takeover bears the signature of private equity. Prices rose in 2022: for flagship brands such as Cohiba and Trinidad and for Montecristo’s premium 1935 line, they were doubled or tripled.
The regional distribution partners felt the new spirit as well. In February 2024, Habanos terminated the distribution agreement with 5th Avenue to lend weight to its demands for a larger share of the company. Switzerland’s Intertabak was likewise told its allocation would be cut by 40 percent — avoidable, it was said at the time, only through a change in the ownership structure. As far as is known, no such change has taken place.
Read on the next page how the sanctions dismantled global distribution, and why Germany was hit while Switzerland was not.