Tag: Swedish Match

  • 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.

  • FDA Renews MRTPs for 8 General Snus Products

    FDA Renews MRTPs for 8 General Snus Products

    After a scientific review, the U.S. Food and Drug Administration issued a renewal of modified risk granted orders to Swedish Match USA, Inc., for eight General Snus products.

    With the renewal, the products may continue to be marketed – as they have been authorized to do so since 2019 – with the following modified risk claim: “Using General Snus instead of cigarettes puts you at a lower risk of mouth cancer, heart disease, lung cancer, stroke, emphysema, and chronic bronchitis.” 

    The products receiving modified risk granted orders are: General Loose, General Dry Mint Portion Original Mini, General Portion Original Large, General Classic Blend Portion White Large-12ct, General Mint Portion White Large, General Nordic Mint Portion White Large-12ct, General Portion White Large, and General Wintergreen Portion White Large.

    The modified risk granted orders issued by FDA are specific to the products as mentioned above and expire Nov. 7, 2032. If the agency determines that, among other things, the continued marketing of the products no longer benefits the health of the population as a whole, the agency may withdraw the orders.

    “The FDA’s review determined that this modified risk claim is supported by scientific evidence, that consumers understand the claim, and that consumers appropriately perceive the relative risk of these products compared to cigarettes,” the FDA stated in a release. “FDA found that these modified risk products, as actually used by consumers, will significantly reduce harm and the risk of tobacco-related disease to individual tobacco users and benefit the health of the population as a whole.

    “In particular, the available scientific evidence, including long-term epidemiological studies, shows that relative to cigarette smoking, exclusive use of these products poses lower risk of mouth cancer, heart disease, lung cancer, stroke, emphysema, and chronic bronchitis. The available evidence does not indicate significant youth initiation of these products.”

    The modified risk granted order does not permit the company to market the product with any other modified risk claim that conveys or could mislead consumers into believing that the products are endorsed or approved by FDA, or that the agency deems the products to be safe for use by consumers.

  • PMI to Invest Millions in Colorado Zyn Production

    PMI to Invest Millions in Colorado Zyn Production

    Photo: PMI

    Philip Morris International will invest $600 million in a factory in Aurora, Colorado, to help meet U.S. consumers’ growing appetite for the company’s Zyn nicotine pouches. The factory is poised to begin operations by the end of 2025 with regular production starting in 2026.

    “PMI and its U.S. affiliates are accelerating their mission to move adults who smoke away from cigarettes in the U.S. by investing in new U.S. manufacturing capacity to meet the increasing demand for nicotine options that are scientifically substantiated as better alternatives,” said PMI Americas President and U.S. CEO Stacey Kennedy in a statement.

    “We believe Colorado is likeminded in its commitment to innovation, economic opportunity and public health, and we’re eager to work with the state and its talented workforce as we expand our U.S. manufacturing presence.”

    Sales of Zyn jumped 80 percent in the first quarter, leaving PMI struggling to keep up with demand. Retail stores have been experiencing Zyn shortages, with some even limiting the number of cans customers can buy each month.

    Supply was further constrained after the company decided to halt online sales nationwide in June following a subpoena in the District of Columbia asking for information on the sale of flavored pouch products that are banned there.

    PMI is also increasing production of Zyn at its factory in Owensboro, Kentucky. In addition to meeting U.S. demand, the investments will also help create capacity for exports, according to PMI.

    Zyn accounted for more than 70 percent of the $8.6 billion nicotine pouch market in 2023, according to sources. Given the relatively young age of the category, there is little brand loyalty, and analysts believe continued supply constraints may prompt some consumers to defect to other brands.

  • PMI Suspends Online Zyn Sales Due to DC Probe

    PMI Suspends Online Zyn Sales Due to DC Probe

    Photo: Swedish MAtch

    Philip Morris International halted sales of Zyn nicotine pouches on its U.S. website as Washington, D.C., officials investigate the company’s compliance with the district’s ban on the sale of flavored tobacco products, reports The Wall Street Journal.

    On June 17, the company’s Swedish Match North America division announced it had received a subpoena from the District of Columbia’s attorney general, requesting among other things information about the unit’s compliance with local restrictions on flavored tobacco.

    A preliminary investigation by the company indicated that there had indeed been sales of flavored nicotine pouch products in the district. According to PMI, these related predominantly to certain online sales platforms and some independent retailers.

    Swedish Match is currently conducting a full review of its sales and supply chain arrangement in D.C. and other U.S. localities where flavor bans apply.

    Pending the investigation, PMI has suspended all online sales on Zyn.com. Sales on this platform have represented “a very small” percentage of the company’s U.S. Zyn volumes, according to PMI.

    In the March quarter, Philip Morris’ shipment volumes of oral smoke-free product volumes surged by 40 percent, mainly driven by Zyn nicotine pouches in the U.S., where shipment volume reached 131.6 million cans.

    Zyn has been available in the U.S. since 2014, but its sales have skyrocketed over the past year and a half, and its parent company is investing in Zyn capacity in the U.S.

    Philip Morris bought Swedish Match in a $16 billion deal in 2022 as the company looked to reduce its reliance on cigarettes amid stricter regulations and a consumer shift toward alternatives to tobacco and traditional cigarettes.