Tag: pmi

  • PMI to Pay $1.2 Million for Violating D.C. Flavor Ban

    PMI to Pay $1.2 Million for Violating D.C. Flavor Ban

    VV Archive

    Philip Morris International’s subsidiary Swedish Match North America (SMNA) will pay $1.2 million to settle an investigation into violations of Washington D.C.’s flavored tobacco ban.

    The District of Columbia attorney general’s office said it had found evidence that SMNA facilitated online sales of “tens of thousands” of flavored Zyn nicotine pouches to D.C. consumers between October 1, 2022, when the ban was enacted, and June 30, 2024.

    PMI, which acquired a 90% stake in Swedish Match for $16 billion in November 2022, must now monitor its distributor’s compliance with D.C.’s ban quarterly and stop sales of flavored Zyn pouches through Zyn.com and related e-commerce platforms, the AG’s office said on Friday.

    Nicotine pouches became the second most commonly used tobacco product in the U.S., according to a report by the Centers for Disease Control and Prevention.

    The tobacco giant suspended sales on Zyn.com after it had been issued a subpoena by the D.C. attorney general earlier this year, according to Reuters reports.

    Swedish Match would continue to focus on its brick-and-mortar stores, PMI said in an emailed statement. Sales of Zyn, which PMI says does not contain tobacco, have surged, growing 41.1% in PMI’s most recent quarterly results.

    The company, which has been looking to move beyond traditional cigarettes, has also expanded production to counter Zyn supply shortages in the U.S. amid a budding black market for nicotine pouches.

  • Consumer Files Suit for Alleged Overcharging for Zyn

    Consumer Files Suit for Alleged Overcharging for Zyn

    VV Archive Photo

    Swedish Match North America is being sued for allegedly overcharging U.S. customers for its popular tobacco-free Zyn nicotine pouches.

    The class action lawsuit, filed on Monday in federal court in Richmond, Virginia, alleges that the Philip Morris International subsidiary is violating federal and state antitrust laws concerning the market for modern oral nicotine pouches.

    The plaintiff, a resident of Florida, claimed that Swedish Match illegally gained monopoly power through various business practices aimed at eliminating rival Dryft from the market, Reuters reports.

    Swedish Match now has an estimated 80 percent of the market for nicotine pouches, which the company sells in different flavors and strengths for about $6 a tin, according to the lawsuit.

    In a statement, Philip Morris, which was not named as a defendant, said, “We believe the plaintiff’s claims are without merit, and we intend to vigorously defend against them.

    Marlboro maker Philip Morris, in 2022, acquired the Swedish tobacco and nicotine products company for $16 billion. Philip Morris has stated an ambition to move away from health-harming cigarettes.

    The consumer lawsuit seeks class action status for Zyn consumers and damages of more than $5 million.

  • PMI Lobbies Nevada Lawmakers for Lower IQOS Tax

    PMI Lobbies Nevada Lawmakers for Lower IQOS Tax

    Credit: Aidman

    Representatives from Philip Morris International (PMI) have begun pitching the benefits of its IQOS heated tobacco device to Nevada state lawmakers. The cigarette maker hopes Silver State legislators will pass a bill next year to tax heated tobacco at a lower rate than traditional cigarettes.

    PMI is preparing to launch IQOS in the United States. As part of those efforts, PMI has hired lobbyists in multiple states, including Nevada, according to media reports. The company has postponed the test launch of IQOS in the U.S. to the fourth quarter. The company declined to say why. The pilot was earlier scheduled to run in Austin, Texas, in the second quarter.

    Anti-tobacco activists have been seeking to derail the U.S. introduction of IQOS, arguing among other things that PMI exaggerates the number of people who have quit smoking regulator cigarettes using IQOS.

    PMI director of Scientific Engagement Brian Erkkila explained how IQOS works in a presentation on Tuesday to Nevada’s Joint Interim Standing Committee on Revenue. While no specific legislative asks were made Tuesday, Eddie Ableser of Tri-Strategies — the Nevada-based government affairs firm working with PMI — told lawmakers the company is looking to start a conversation about how the product should be taxed.

    “The intent is not a complete absolution of harm,” he told the lawmakers. “It’s harm reduction. How do we move and target the current cigarette smokers in Nevada? How can we move them onto a harm reduction product that helps them?”

    He added, “We develop tax policy generally to motivate consumers one way or the other.”

    Nevada tax policy does not consider heated tobacco products such as IQOS as other tobacco products (OTPs), which includes vaping devices, and they are taxed at 30 percent of the wholesale price. However, most tax codes generally consider heated tobacco products to be traditional cigarettes.

    In Nevada, cigarettes are taxed the equivalent of $1.80 per pack. According to the anti-nicotine nonprofit Truth Initiative, Nevada is in the middle of the pack (25th highest) when it comes to tax rates for cigarettes.

    According to the Organized Crime and Corruption Reporting ProjectPMI has successfully lobbied at least 10 countries to tax heated tobacco products at a lower rate than traditional cigarettes, using the argument that the product is far less harmful and less worthy of any kind of  “sin tax.”

    PMI launched IQOS in Japan a decade ago and has since expanded into dozens of other countries. According to Alexandra Wich, a senior manager of state regulatory and public policy at PMI, intellectual property litigation has kept the product out of the U.S. market, but those issues have been resolved.

    The U.S. Food and Drug Administration gave PMI permission to market their products as reducing exposure to the harmful chemicals produced by combustible cigarettes, concluding that “the net population-level benefits to adult smokers outweigh the risks to youth.”

  • Zyn Adds 450 Jobs, $232 Million Investment in Kentucky

    Zyn Adds 450 Jobs, $232 Million Investment in Kentucky

    Credit: PMI

    The expansion will deliver $277 million annually in regional economic impact and increase the plant’s workforce by 40 percent.

    Philip Morris International’s Swedish Match affiliate is announcing an investment of $232 million to expand the production capacity of its manufacturing facility in Owensboro, Kentucky.

    The expansion is expected to create an additional 450 direct jobs with an ongoing annual economic impact of $277 million and 410 indirect jobs for the Commonwealth of Kentucky. The facility produces ZYN nicotine pouches to help meet the growing demand from legal-age consumers switching from cigarettes or other traditional tobacco products.

    “Philip Morris International’s Swedish Match affiliate has been an important partner and job creator in this region for many years, and I’m excited to see this incredible new investment and the 450 great job opportunities it is creating for families in Owensboro and the surrounding region.”

    Kentucky Gov. Andy Beshear

    “Philip Morris International’s Swedish Match affiliate has been an important partner and job creator in this region for many years, and I’m excited to see this incredible new investment and the 450 great job opportunities it is creating for families in Owensboro and the surrounding region,” Kentucky Gov. Andy Beshear said. “Our economy continues to set records, and today’s announcement shows we’re bringing jobs to our people instead making our people move to the jobs. I want to thank and congratulate company leadership for doubling down here in the Commonwealth and look forward to many more years of prosperity.”

    Construction of the expanded facility is already underway, including adding more production space. Progressive production increases are expected during the project, which is targeted for completion by the second quarter of 2025. The construction phase alone is expected to create nearly 2,800 jobs and have an economic impact of about $414 million.

    Career opportunities at the facility cover a wide range of skill levels, including positions such as engineers, production staff, technicians, and quality control. Career opportunities can be found here.

    In addition to facility expansion and ongoing optimization of processes to increase capacity progressively over the coming quarters, the Kentucky facility will move from a 24-hour, five-days-per-week schedule to a 24-hour, seven-days-per-week schedule to boost production starting in the fourth quarter of this year.

    The Swedish Match Owensboro facility currently has about 1,100 employees. The ongoing expansion of the facility in Kentucky is expected to provide around 900 million cans of capacity by 2025.

    In July, PMI announced an investment of $600 million over the next two years through its U.S. affiliate to open a nicotine pouch manufacturing facility in Aurora, Colo. The Aurora facility and Owensboro expansion are designed to provide the capacity needed in the near and mid-term to meet ZYN’s current growth rate with U.S. legal-age nicotine consumers.

  • PMI Gets Appeals Court Support for Suit Dismissal

    PMI Gets Appeals Court Support for Suit Dismissal

    The United States Court of Appeals for the 2nd Circuit on Dec. 26, 2023, affirmed a district court’s dismissal of a putative class action asserting claims against Philip Morris International that the company made false or misleading statements regarding both the scientific studies it conducted in support of an application to the Food and Drug Administration and the outlook for the company’s sales growth in Japanese markets, according to Lexology.

    The district court held that the plaintiffs failed to adequately prove falsity or scienter. The 2nd Circuit affirmed the dismissal, holding that the plaintiffs failed to adequately plead falsity.

    The court decided two questions of first impression in the 2nd Circuit, holding a securities fraud defendant’s statement that its scientific studies comply with a methodological standard that is published and internationally recognized, but stated in general and inherently subjective terms, is properly analyzed as a statement of opinion rather than a statement of fact, and holding that, whereas a securities fraud defendant’s statement expresses an interpretation of scientific data that is ultimately endorsed by the FDA, such a statement is per se “reasonable” (i.e., supported by “meaningful inquiry”) as a matter of law. 

    The plaintiffs alleged that PMI made misrepresentations in securities filings and public statements about clinical studies it conducted in support of an application to the FDA to sell IQOS in the U.S. and market IQOS as reduced risk. The plaintiffs also alleged that PMI made misleading statements about its growth projections in Japan regarding IQOS. The district court found that none of the challenged statements were false or misleading because all the challenged statements were true, inactionable puffery or inactionable statements of opinion. Furthermore, the district court found that the plaintiffs failed to establish the required strong inference of scienter, either by alleging facts showing motive and opportunity to commit fraud or strong circumstantial evidence of conscious misbehavior or recklessness. Accordingly, the district court granted the defendants’ motion to dismiss the plaintiffs’ first amended complaint and denied the plaintiffs’ motion for reconsideration. After the district court dismissed the plaintiffs’ second amended complaint, this time with prejudice, the plaintiffs appealed.

  • PMI Expands IQOS Iluma in Middle East Region

    PMI Expands IQOS Iluma in Middle East Region

    Philip Morris International has launched IQOS Iluma in Saudi Arabia, Kuwait and Bahrain, with a goal of creating a smoke-free future in the Gulf Cooperation Council region, according to the Saudi Gazette.

    “Adult smokers may be unaware of the choices they are making, largely due to the lack of information and knowledge on products that bring them harm, versus scientifically backed products that reduce the likelihood of smoking-related disease,” said Tarkan Demirbas, area vice president of the Middle East at Philip Morris Management Services (Middle East) Limited. “At PMI, we are invested in providing existing adult smokers with better alternatives through harm reduction innovations, which can help them take a step back from cigarettes toward better alternatives.”

    “Smoking-related diseases today call for a pragmatic solution that places consumers at the forefront while moving away from cigarettes,” said Saim Yasin, director of marketing and digital at PMMS. “IQOS Iluma is our latest innovation in tobacco-heating systems that will accelerate our goal toward a smoke-free future. Through a growing portfolio of smoke-free alternatives, we are reaffirming our commitment to create realistic, society-wide change that can reimagine the world we are living in—without cigarettes.”

    The IQOS Iluma series offers three devices: IQOS Iluma Prime, IQOS Iluma and IQOS Iluma One. All the devices use new induction heating technology but offer different designs.

  • PMI Launches Tobacco-Free Heat Stick for IQOS

    PMI Launches Tobacco-Free Heat Stick for IQOS

    Philip Morris International unveiled a zero-tobacco stick for use with its heat-not-burn device IQOS, which may help the company avoid tax and other regulations that affect its tobacco products in some markets, according to Reuters.

    The new sticks, called LEVIA, do not contain tobacco but rather a “nontobacco substrate” infused with nicotine. It offers flavors including tobacco, menthol with blueberry and peppermint.

    LEVIA may avoid the heavy taxes or other controls imposed on other tobacco products, according to CEO Jacek Olczak. He said it “may not be subject to flavor regulations in some jurisdictions” and that it “doesn’t fit” in existing fiscal categories.

    A PMI spokesperson declined to comment on when and where LEVIA would launch or what substance replaces the tobacco.

  • PMI to Aquire Medical Marijuana Inhaler Company

    PMI to Aquire Medical Marijuana Inhaler Company

    Syqe Inhaler (CNW Group/Syqe Medical)

    Philip Morris International plans to acquire Syqe Medical, an Israeli company, according to Calcalist. The deal could reach $650 million.

    Syqe’s main product is a metered-dose inhaler for pain reduction using medical marijuana.

    PMI will initially invest $120 million to aid in the process of obtaining U.S. Food and Drug Administration approval for Syqe’s inhaler. If approval is received, PMI will purchase all shares of Syqe for $650 million.

    PMI subsidiary Vectura will conduct the transaction.

    In 2016, PMI invested $20 million in Syqe.

  • PMI Offering Australian Pharmacies Discount Vapes

    PMI Offering Australian Pharmacies Discount Vapes

    Credit: Va Butenkov

    Philip Morris International announced it has made a deal with some Australian pharmacies to supply its VEEV vaping products below cost, despite the company’s opposition to the government’s new prescription vaping model.

    VEEV marketing materials seen by Guardian Australia offer pharmacists an “introductory offer” to supply nicotine pods and devices at a discount.

    The offer is also on the condition pharmacies do not sell a packet of two VEEV nicotine pods for more than AUD14.90 ($9.98) or devices for more than AUD19.90 – cheaper than what wholesalers can offer.

    The recommended retail price for comparable pod products is AUD24.99. The marketing material for the offer only mentions PMI in fine print at the bottom of the document.

    A spokesperson for the Pharmaceutical Society of Australia said it “urges pharmacists to be skeptical of any commercial offer from big tobacco”.

    “There are currently no nicotine vaping products registered on the Australian Register of Therapeutic Goods and no company should be advertising unregulated products to Australian healthcare professionals,” the spokesperson said.

    In May, the federal health minister, Mark Butler, announced that the government will ban the importation of nonprescription vaping products – including those that do not contain nicotine. Minimum quality standards for vapes are also being introduced, including restricting flavors, colors and other ingredients.

    Vape products will require pharmaceutical-like packaging, and the allowed nicotine concentrations and volumes will be reduced. All single-use, disposable vapes are being banned.

    A Philip Morris International spokesman told Guardian Australia; “We have always been open and transparent about the fact we will work within whatever legal and regulatory framework exists for these products in Australia”.

    “This is in stark contrast to dozens of other vaping companies who are providing their product via the black market,” he said.

  • Judge Rules Reynolds can Continue to sell Vuse

    Judge Rules Reynolds can Continue to sell Vuse

    A Virginia federal judge denied a permanent injunction request from Philip Morris International (PMI) to bar R.J. Reynolds Vapor Co. from selling vaping devices that a jury found violated PMI patents. In the order, the judge stated that banning the devices would harm public health.

    However, RJRV was ordered to pay a modest patent royalty to its rival PMI. Judge Leonie Brinkeina of the Eastern District of Virginia stated that RJRV is required to pay a royalty of 1.8 percent of net sales for infringing on a patent used in Vuse Alto cartridges, and a 2.2 percent royalty for infringing on a patent used in Vuse Solo G2 cartridges, reports the Winston-Salem Journal.

    The royalties will be enforced for the remaining life of the patents. The royalties will be paid quarterly, retroactive to June 16. PMI said that if a permanent injunction was not approved, it requested a 33.5 percent royalty on the Alto cartridges and a 3.75 percent royalty on the Solo G2 cartridges.

    The royalties are on top of jury awards in 2022 that totaled $10.91 million for the Alto infringement and $3.16 million for the Solo G2 infringement.

    PMI said in a statement that “while we continue to review the court’s decision, we reiterate our gratitude to the jury for its finding that BAT’s affiliate RJR infringed two of our patents with its Vuse products, its confirmation of BAT’s obligation to pay us damages, and its vindication of our industry-leading investments in smoke-free technologies, such as e-vapor.”

    RJRV said in a statement that “while we welcome the decision to reject an injunction, we are disappointed with the underlying verdict regarding patent validity and infringement.”

    “R.J. Reynolds Vapor is currently evaluating next steps, including the possibility of an appeal to the U.S. Court of Appeals for the Federal Circuit, seeking reversal of the jury’s verdict regarding patent validity and infringement.”

    Brinkeina determined that PMI “has not established that it has suffered irreparable injury” from the patent infringements.

    The judge wrote that “(PMI) did not have a significant market (in the U.S.) before Reynolds infringed on its patents, has not demonstrated that it has brand recognition in the U.S. for its products, and has not provided compelling evidence that shows the loss of goodwill in the domestic market.”

    Brinkeina also determined that the public’s interest in having potentially harm reduction Alto and Solo G2 cartridges available at retail outweighs ordering a permanent injunction “given the undisputed popularity of Reynolds’ Vuse products.”

    In the latest Nielsen report on convenience store sales of tobacco products, top-selling Vuse holds a 42.2 percent market share, compared with Juul at 26.1 percent.