Consider this. The cigar shop at Beirut International Airport sells the largest volume (100,000 boxes per year) at arguably the best value anywhere in the world, while its VIP cigar lounge has won a Frontier Award (the “Oscar” of the global duty free industry) in the Special Concept of the Year category.

Lebanon imports some 5 million cigars a year (roughly equivalent to 5% of Cuba’s annual export production) while the market is registering healthy annual growth of around 10%. This puts Lebanon firmly in the world’s top 10 cigar consuming nations alongside Germany, France and Spain. It is not surprising therefore, that Phoenicia Trading, the company that imports Cuban cigars into Lebanon, is keen to nurture this national obsession. 

This culture has not come easily. Robust marketing has been key in increasing awareness and developing tastes. “Our marketing strategy is mainly focused in the on trade market,” said Walid Saleh XXXX of Phoenicia Trading. “We make regular, often monthly promotions, cross promotions, continuous advertising and panels, motivation certificates for loyal customers, sponsorship agreements at important events, associations and live demonstrations.” Saleh also explained that Phoenicia Trading is also involved in brand building through alliances (it has teamed up with drinks giant Diageo) to sell cigars via complementary drink brands.

Retailing has also matured. During the war, cigars were sold in kiosks, other non-specialist stores and at duty free shop at the airport. It was not until 1994 that the first specialist store, La Casa Del Habano, opened. Since then others have followed, elevating cigars and cigar accessories – humidors, lighters cutters and the like – into a higher retail consciousness.  The smoker has also evolved. According to Saleh, “cigar smoking began as a trend, a status symbol, but now it has developed into a genuine culture. The customer knows exactly what he wants and cigars are becoming increasingly offered as gifts.”

Most, though not all the best cigars come from Cuba, which exports some 125 million cigars a year, saving another 100 million for the domestic market. Cuba is considered the finest tobacco-growing land in the world due to the nature of its soil and its climate, which produces a quality of leaf not found anywhere else. It is the long process through which the Cuban cigar undergoes before it gets to the consumer – seeding, farming, harvesting, fermentation, manufacturing, quality control, boxing and ageing – that allows them to charge top dollar and which puts them on a higher quality plane than cigars made in the Dominican Republic and Honduras (so potent a brand is Cuba that those cigar manufacturers that moved to other islands have lost their mystique and market share).

For the record, the trend today among Lebanese smokers is for medium ring gauge cigars, a move away from the bigger ring gauge that once defined the taste of the local smoker. The most popular brands are, in order, Romeo Y Julieta, Partagas, Hoyo De Monterrey, Cohiba, Montecristo, while the most preferred sizes are, again in order of popularity, Robustos, Petit Coronas, Coronas, Churchills, and Corona Gordas. (Double Coronas, which require longer – up to three hours to smoke – come in 8^th place.).

Smoking a cigar is closely associated with having made it. It is the totem of celebration. It is also a luxury good, the finest of which stand alongside the best caviar, watches, clothes, and wine. Women are gradually learning to enjoy delights of cigars, especially the smaller models. Perhaps therefore it is fitting to leave the final word with actress Demi Moore, who claims to be partial to a puff. “A cigar is like a fine wine,” she said recently. “There’s a quality, a workmanship, a passion that goes into the smoking of a fine cigar.” Who would disagree with her?

When one thinks of luxury goods, it could be argued that no commodity comes to mind quicker than diamonds. This is especially good news for Lebanon, which, historically, has a very intimate relationship with the dazzling rocks.
“Lebanon knows about diamonds,” explained Atef Nsouli, second in charge of one of Lebanon’s top jewelry exporters, Nsouli Jewelry.
“The old families here were the gateway to the Gulf for diamond jewelry. They had the know how from the West and the trade with the East and the South.”
Lucky indeed, since, for an economy whose many sectors have been battered over the years, and especially as of late, jewelry generally, and diamonds in particular, have stood the test of time, posting successive growth rates on the export side since 1996.
According to the Ministry of Trade and Economy, jewelry is Lebanon’s number one export industry, constituting more than 30% of the overall industrial sector in Lebanon.
The latest data shows that jewelry exports increased an astounding 350% between 1996 and 2004 (2003 saw an unprecedented jump mainly due to volatile gold and precious stone prices).
Overall, the country’s jewelry sector is believed to be a $530 million market with slightly more than half of that amount attributed to exports.
Although hard data is difficult to come by, it is also believed that the sector employs roughly 20,000 persons in both retail positions and production.
“The Gulf countries are basically our main target markets,” explained Nsouli. “Around the Gulf we have many partnerships… the name is not on the door necessarily but from zero to finish everything is done here and is Nsouli.”
Importing unfinished diamonds from Belgium, precious stones from India and precious metals like gold from Africa, many of Lebanon’s top jewelers like Selim Mouzannar, Chatila, Najib Tabbah, Mouawad and Paolo Bonja have indeed made a global name for themselves as high quality, high-end producers of jewelry
Especially in recent years, this has proved extremely fortuitous since Lebanon itself, despite the positive export figures, appears to be at a turning point in terms of the industry.
In fact, several domestic industry members told Executive that Mouwad recently opened a huge production facility in China where costs can be as much as 50% less than in Lebanon.
More significantly, China as a whole is finally starting to pose a serious challenge to high–end exporters the world round because the quality of the workmanship has improved so dramatically in recent years.
“They (the East Asian producers) are very competitive,” said Vasken Hadidian, President of the Lebanese Jewelry Syndicate. “They are definitely the next invader for the jewelry market although as finished products and diamond quality they are not there yet.”
Nevertheless, the situation has already reached a point where, according to one top jeweler who asked to remain anonymous, “Some Lebanese now import from East Asia to re-export to GCC countries.”
What all this means is that Lebanese Jewelry brands are becoming international brands more than anything else – with global production facilities and offshore subsidiaries in places like Dubai.
All of which represents a decided shift from previous decades when Jewelry was produced locally, Gulf tourists would come here to buy jewelry they could not buy near to home and local exporters would sell directly from within the geographic borders of the country.
“Maybe I should have an offshore company to resell jewelry,” added one jeweler. “If I have a an order from Saudi, I would then sell from Dubai to jump over the taxes that we encounter here in Lebanon.”
The idea is hardly far fetched.
Today, Dubai offers the Dubai Metals and Commodities Centre, a hub for gold, diamonds and commodities trade aimed at attracting key players throughout the entire supply chain.
“It is a very ambitious project and they are doing well,” explained Selim Mouzannar. “They try to gather all the retailers within the free zone right next to the cutting and finishing facilities. It is incredible and very hard to compete with from within Lebanon.”
The government has done its part to alleviate some of the strain.
According to Hadidian, Lebanon has signed onto the Kimberly process agreement, which currently involves 48 governments and the diamond industry in an attempt to create a certification system that would label legitimate stones, thereby blocking the sale of conflict diamonds and protecting the integrity of the $7.8-billion annual trade.
Statistics show that about four percent of that trade is in conflict diamonds, which are said to have financed terrorism.
Lebanon also eliminated customs duties on all consumables and chemicals used in jewelry manufacturing, stopped tariffs on precious stones and decreased the VAT from 10% to just 1.2%
“These steps help, but there is much work to be done,” added Hadidian.
“Lebanon is known around the world as a top producer of jewelry but the market is changing rapidly even as Lebanese companies grow outside of the country.”

Lebanese couture
When it comes to fashion, Lebanese designers are no slouches. In an international market long dominated by the likes of Chanel, Valentino and Jean Paul Gautlier, a handful of Lebanese designers, spurred on by the relative abundance of textiles as well as the country’s longstanding ties to high-yield export destinations, have steadily managed to carve out their own position within the world of Haute Couture.
In the process, a privileged space has opened up to these native sons and daughters – a world of Paris fashion shows, $15,000 one of a kind evening dresses and the coveted celebrity customer which can make or break a name (and a business) almost overnight.
Thus, despite the high entry costs and fickle buying habits of the super rich, speaking with newly minted Lebanese designers, as well as Haute Couture mainstays like Elie Saab and Zuheir Murad, one is left with the strong impression that the increasing prominence of Lebanese designers on the international scene has been an outright boon for the export end of the business, especially in the Gulf, Europe and America.
“The name of our brand has greatly expanded worldwide,” explained Zena Chedid, International Communications Director for Elie Saab.
“America, especially, is a growing market for us. At the same time, new markets have opened up in Asia and South America.”
While Chedid, like all designers, was reluctant to reveal any concrete numbers, at least one local industry insider pegged overall luxury fashion exports in the tens of millions of dollar range, with the bulk of that accounted for by Gulf buyers.
“The truth is that we could not have made it to Rome [Elie Saab was the first Arab designer in the Middle East to present a couture collection in Rome in 1996] if we didn’t have the success that we had in the Arab world. Forty percent of our couture clients are in the GCC market,” added Chedid.
For newcomers like Wissam Chammas too, the Gulf markets are similarly viewed as a relatively affordable stepping stone, a gateway really, to the loftier heights already attained by the handful of Lebanese designers who showed last month, on calendar and off, at Paris Fashion Week.
“Regionally and internationally the Lebanese designers are very important now,” explained Chammas from his atelier in Jdeideh.
“The quality of the materials and the designs themselves, especially in the wedding dresses and evening dresses produced by high-end Lebanese designers, are extremely popular in Saudi Arabia, Kuwait, the UAE and also Egypt. You see, Gulf buyers and others here order from Lebanon because we are living within the Arab world so we know what they want and what they think and what they like to wear.”
For Chammas and other designers, three additional factors play to the favor of Lebanese designers: First, unlike in Egypt, designers here have a wide access to high-quality, internationally produced textiles – thousands rather than dozens of styles can be easily perused and acquired. Second, there are relatively few high-end designers operating from within the region. And third, putting on a show and reserving space on the satellite channels is relatively affordable – perhaps ten or twenty thousand dollars rather than the 100,000 plus for Paris, Milan or Rome.
“There are not many designers in the Gulf, for one,” explained Chammas. “ So Lebanon is really first and almost alone. And you can afford to enter the marketplace.”
Of course, aspiring to the favor of regional buyers is but one position fancied by all local designers. After all, the real prize is the huge export markets of Europe and America.
“ Names like Saab, Robert Abi Nader and Reem Akra [a Lebanese wedding dress designer, based in New York City] are now clearly on the international radar,” explained Mandy Erikson, CEO of New York’s Showroom Seven and PR rep for Haute Couture designers like the edgy Imitation of Christ line which showed last month alongside Saab and others at Paris Fashion Week.
“They’ve managed to carve out a niche with a distinctive style that blends many different components – Middle Eastern, one could say, and European all at once. Really it is a true international pastiche.”
“The reception in Paris for the Zuheir Murad show was excellent,” explained Rita Lamah, executive manager at the Bouchrieh-based designer.
“He started ten years ago and has grown steadily ever since, both in the region and internationally. We now have stores in several capital cities around the world and at the same time we have numerous stars in the Middle East who wear Zuheir Murad. We are also the only line in the region doing Haute Couture men’s fashion.”
While the increasing success garnered by Lebanese designers is obviously appreciated by the designers themselves, not to mention their aspiring competitors, it is also increasingly being seen as the key to reviving the overall Lebanese apparel sector.
Indeed, according to a January 2004 study by the United Nation’s Economic and Social Commission for Western Asia (ESCWA), textile manufactures in Lebanon must target high-end fashion markets if they are to counter dwindling exports and daunting competition from international imports.
“The haute-couture (high-end fashion) segment, which has also been growing relatively fast over the past five to 10 years, may help Lebanon to recover the reputation for fashion that it once enjoyed in the region,” read the report, “ A Case Study: The Apparel Industry in Lebanon.”
Demand for value-added fashion, the report added, such as wedding gowns and lingerie, has increased because of the large number of predominantly rich tourists, especially Gulf Arabs, who are seeking these goods both here and at home.
“There is evidence that [a] painful transition is beginning to produce some positive results, which eventually may lead to a revitalized, but very different sector based on high skill levels, niche markets and high-margin products that target the upper echelons of the export and domestic market,” the study concluded. “The evidence is a powerful affirmation of the great potential that could yet be unleashed by the Lebanese apparel manufacturing industry.”
Lets hope so.

In vino veritas

Finally a word about wine. Lebanese wine has been around for 6,000 years but until recently, it was obscure and unpredictable. It wasn’t until 1979, when Serge Hochar’s Chateau Musar created a stir at the Bristol Wine fair in the UK that the world began to sit up and take notice. Today, Hochar’s greatest vintages are among the most coveted in the world and sell for top dollar.

More recently, Chateau Kefraya’s Comte De M 1996 was eulogized by Robert Parker the gunslinging American wine critic. His trademark grading system, is enough to make or break a vintage. ‘Below 90 you can’t sell it,’ remarked the equally unconventional Bordeaux wine merchant Jeffrey Davies. ‘Above 95, you can’t find it.’ Parker awarded The Comte de M ’96 a score of 91 points, a score Parker considers denotes ‘an outstanding wine of exceptional complexity and character. I consider these terrific wines.’  It was a landmark ruling and demonstrated that Lebanese wine was not a one off.

Since then, many wine critics have passed similar, if less dramatic judgments on Lebanon’s wines. Oz Clarke, the British Wine celebrity, has called Chateau Clos St Thomas “stunning” while Chateau Ksara, Domaine Wardy, Massaya and Cave Kouroum have all been ranked and in the best wine annuals and guides. In London and Paris Lebanese wines can be found in the finest outlets, including the Wine Society, Harrods, Selfridges, Nicholas, the Paris Ritz, Le Crillon, and the Georges V. Other, less high profile but equally lucrative, markets include the US, Canada, Germany, Sweden, Italy, Russia and Japan. It’s a tradition, it seems that, that won’t go away.

There is a dark blue Ferrari that is often parked, for weeks at a time, outside one of Beirut’s most prestigious hotels. The number plate is Saudi Arabian. The valets cluck around it like mother hens, dusting and wiping, as it sits, waiting for its owner to gun the engine and pull out into the tree-lined streets of Ashrafieh. A home away from home? Who knows? But distilled into this mini montage is everything modern Lebanon can deliver to the discerning: luxury, beauty, service, and ambiance.

At the risk of sounding smug, I am going to venture that Lebanon and Beirut possess a cachet that other Arab capitals don’t. Fairly or unfairly, the Lebanese are known for their high living in a way that the Jordanians, Syrians, Iraqis and Palestinians simply are not, while gleaming new cities of the Gulf – the thrusting, efficient, commercial powerhouses that they are – do not have Beirut’s distressed elegance. The Lebanese are seen as the “European” Arabs and as such have carved out a unique niche for themselves in the enjoyment and purveyance of luxury living.

Even the diaspora has exported this reputation for joie de vivre and extravagance. True, the French apparently have a phrase for us “comme les Libanais” (in effect, a bit too much jewelry) and the English may wince at how we behave in their better nightclubs and have made the foodhalls at Harrods and Selfridges our own, but the overwhelming sense is that we are a nation of travelers and traders who live to live well and consume in style. Lebanese restaurants from London to Sydney have been elevated above mundane ethnic fare. Chateau Musar stands alongside the best Bordeaux and, while, to the world, the Greek Ouzo is seen as the drink of the cheery tourist, Arak is held up as the real deal, a drink for those in the know. It is all to do with perception and, despite everything, we have still held onto our mystique.

Ironically, the war may have further whetted our appetite for luxury and brand consciousness. It forced a new generation to leave and make their fortunes, while those who could afford to decamp to the capitals of Europe and the Americas merely consolidated their knowledge of Western retail habits. This know-how has been shipped back by the container load and today, 15 years after the guns fell silent and four years after the events of 9/11 shifted the Arab tourist dynamic to cobbled streets of downtown Beirut, Lebanon is settling into its rightful role of the region’s cornucopia. 

Just as important is that our fellow Arabs recognize this in us and want us to sell it to them with all the panache of our Phoenician ancestors. High net worth clients and a nation of boutique owners: a match made in heaven.

We have the best goods but we also have the chutzpah. A shopper knows that if he walks into even the finest boutique or jeweler, he can put his cards on the table and negotiate a deal, because we are the original dealmakers. Try doing that in Milan or London or even Dubai and you will get an awkward look and a lecture on policy. The only policy in Lebanon is to sell.

And we do it in style. Our service is in itself a luxury item. Our human resources – shop assistants, waiters and concierges – look a million dollars, can converse in two, sometimes three, maybe even four languages and above all know how to talk to their fellow Arabs. The importance of this, especially when selling a luxury item, is impossible to overestimate. In a world where the concept of service is in decline and where the Arab is often viewed as a potential trouble maker, the fact that a Saudi Arabian woman can arrive in Beirut, anonymously drop $1 million on jewelry, watches and clothes and have them dropped off at her hotel within 30 minutes, is not only good retailing, it’s a national asset. Go to London, once the benchmark for this kind of thing and see what you are now faced with: clueless asylum seekers from Eastern Europe and equally scatterbrained Australians and South Africans on a gap year.

Women, commonly accepted, especially in the Arab world, to be the most frequent and ravenous shoppers, can feel free in Beirut. If they are from the Gulf countries, none of the strictures of home apply and there will also be none of the suspicious looks they might get in Europe. Petty crime is almost non-existent, while the security threats that cow the Americans and the Europeans are dismissed by the Gulf Arabs who live with similar anxieties in their own countries. They will and do take their chances.

And let us not forget the triple assets of ambiance, architecture and temperature. Not only does Lebanon have the goods at the right price, for those who live in an air-conditioned bubble, it offers the chance off shopping and dining in a Mediterranean atmosphere in a country that was not built in the last 60 years and in a climate that won’t kill you if there is a power outage.  No wonder, wealthy Arabs and expatriate Lebanese are paying top dollar to live in the downtown where they can moor their boat, shop and dine in an environment unlike anywhere in the region.

For the Lebanese, there is now less and less need to travel to shop, no more tiresome shopping expeditions to Europe’s capitals. The names they so covet abroad – Les Galleries Lafayette, Harvey Nichols and Printemps – have all hinted that they will open up shop in Beirut. The Downtown’s retail dynamic is full of promise. Already the area that borders Rues Foch and Allenby has become the epicenter of fine shopping and one that will eventually become Beirut’s Bond Street. And there is more to come. The Souks, with roughly 52,000 m2 of retail space – including a 15,000m2 dept store – will simply add to the critical mass and could easily achieve revenues of $270 million in its first year, nearly 10% of Lebanon’s retail sector. 

Lebanon has also moved into the modern retail culture with a remarkably efficient VAT refund system (operated by Global refund and the Ministry of Finance) that has been in operation since 2002. Not only does this offer the immediate attraction of getting one’s money back but it also demonstrates a degree of regulation in the local retail sector.

Finally, at the risk of painting a picture of mindless consumption, local retailers will tell you that the tourist shopper does not come to Beirut to spend on necessities. Interestingly enough when it comes to sales of premier fashion clothes, watches and jewelry, Beirut compares well to Dubai, the new kid on the block, but loses out to the Emirate on electronic goods: Dubai – technical and new – versus Lebanon – sensual and old. 

“They are on holiday and want to buy a bauble, not a stereo,” said one market watcher. A Rolex slid across the table during dinner, the thrill of a new Cartier necklace, worn as the waves lap at the beach at sunset, a kilo of finest Beluga caviar or even the throaty roar of a pedigree sportscar. Beirut can offer it all.