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Tag: Swedish Match

  • PMI Suspends Zyn Sales Due to DC Probe

    PMI Suspends 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.

  • Swedish Match MRTP Comments Due July 5

    Swedish Match MRTP Comments Due July 5

    The U.S. Food and Drug Administration posted the final set of application materials related to renewing existing modified-risk tobacco product (MRTP) orders for Swedish Match U.S.A.’s General Snus products.

    The agency announced a deadline for public comments. To ensure they receive consideration by FDA, the applications must be submitted to the docket by 11:59 p.m. EDT on July 5, 2024.

    The application materials, redacted in accordance with applicable laws, can be found on the FDA’s website. “Before making a final determination on an MRTP application, FDA considers all information available to the agency, including public comments and recommendations from the Tobacco Products Scientific Advisory Committee (TPSAC),” a release states.

    The FDA recently announced a TPSAC meeting to discuss these renewal applications, scheduled for June 26, 2024, which the public is able to attend in person at the FDA White Oak Campus or virtually. Interested persons may present data, information, or views, orally or in writing, on issues pending before the committee.

    Written submissions may be made to the contact person on or before June 20, 2024.

  • General Snus MRTP up for Renewal

    General Snus MRTP up for Renewal

    Photo: Swedish Match

    The U.S. Food and Drug Administration’s Tobacco Products Scientific Advisory Committee will hold a public meeting on June 26, 2024, from 9 a.m. to 4:30 p.m. Eastern Time at the FDA White Oak Campus in Silver Spring, Maryland.

    Among other topics, the committee will discuss the renewal of a risk modification order submitted by Swedish Match USA for several loose snus and portioned snus products sold under the General brand name.

    The meeting will also be webcast.

  • PMI Sued Over Zyn

    PMI Sued Over Zyn

    Photo: PMI

    In the first major legal challenge to oral nicotine pouches, a consumer has sued Philip Morris International over its popular Zyn brand, saying the product is addictive and harmful to young people, reports BNN Bloomberg.

    The plaintiff, Bailey Wolters, alleges addiction and dental issues as a result of his Zyn use. The lawsuit says that the pouches deliver more nicotine than cigarettes, and that PMI benefits from “Zynfluencers” who promote the brand on social media.

    The suit, which is seeking class-action status, also names as a defendant Swedish Match, which made the pouches before PMI bought it for $16 billion in 2022.

    According to the plaintiff, the companies failed to warn consumers about the risk of addiction and other harmful effects like cognitive issues, cardiovascular injuries, gastrointestinal problems and gum disease.

    PMI insists its pouches are intended only for existing users of nicotine products.

    The case was brought by Schlesinger Law Offices, whose initial lawsuit against Juul Labs investors including Altria Group expanded into thousands of legal actions and led to Altria’s eventual settlement of $235 million.

  • MRTP Renewal Filed for General Snus

    MRTP Renewal Filed for General Snus

    On Nov. 30, 2023, the U.S. Food and Drug Administration filed for scientific review modified-risk tobacco product (MRTP) renewal applications submitted by Swedish Match USA for General Snus smokeless tobacco products, including:

    • General Loose;
    • General Dry Mint Portion Original Mini;
    • General Portion Original Large;
    • General Classic Blend Portion White Large, 12 count;
    • General Mint Portion White Large;
    • General Nordic Mint Portion White Large, 12 count;
    • General Portion White Large; and
    • General Wintergreen Portion White Large.

    In 2019, the FDA issued modified-risk granted orders for eight smokeless tobacco products made by Swedish Match USA. These orders expire in 2024. To continue marketing the MRTPs after the authorized five-year term, the company submitted an MRTP renewal application to the FDA.

    Starting Dec. 1, the public may submit comments on these applications on regulations.gov.

  • Guantanamera Loses Duo Trademark Lawsuit

    Guantanamera Loses Duo Trademark Lawsuit

    Image: Swedish Match

    Guantanamera has lost a dispute over the Duo trademark with Swedish Match, reports Halfwheel.

    The lawsuit alleged that Swedish Match, Sam’s Club and Costco infringed on the Duo trademark with the sale of White Owl Duos.

    Judge Jonathan Goodman of the U.S. District Court for the Southern District of Florida ruled that Guantanamera “was able to establish two of seven factors used to determine whether there is a likelihood of consumer confusion among cigar customers; it failed to tip the scales in its favor.” He said the company “concedes that it has no evidence of even a single instance of actual confusion, which is often cited as among the most important of the seven factors.”

    “GCC did not provide any survey evidence or expert witness testimony concerning actual confusion or even a likelihood of confusion,” the judge wrote in his ruling. “Given the length of time that the parties’ products coexisted and White Owl duos’ ample sales figures, the court would certainly expect evidence of actual confusion if any consumers were actually confused. But there was none.

    “Plaintiff’s failure to come forward with evidence of actual confusion is not from a lack of effort. The president and founder of GCC testified that he and his lawyers actively monitored the marketplace for potential infringers of its Duo mark. The president also testified that he had continuous, daily interactions with his customers and that he had personally visited convenience stores and gas stations on almost a weekly basis throughout the relevant time period. Yet, he admitted that he first learned of White Owl duos cigarillos only through his attorneys in April 2021, a year after their introduction. This factor weighs in favor of Swedish Match.”

  • Pouch Trade Secrets Dispute Settled

    Pouch Trade Secrets Dispute Settled

    Photo: Andrii

    Kretek International, Modoral and Swedish Match have settled a legal dispute relating to nicotine pouch trade secrets, reports Law360.

    In 2020, Swedish Match alleged that Kretek and its subsidiary Dryft Sciences, as well as Modoral, misappropriated six trade secrets concerning the manufacturing and formulation of nicotine pouches.

    The defendants all denied Swedish Match’s claims and said they don’t owe the company any damages.

    Swedish Match sells nicotine pouch products under the name Zyn based on U.S. Patent No. 9,161,908 and trade secrets that it bought from Swedish nicotine company TillCe. According to Swedish Match, one of TillCe’s affiliates in 2016 breached its agreements with Swedish Match by selling the trade secrets to Kretek, which formed Dryft Sciences to sell products in competition with Swedish Match.

    Kretek then formed Dryft Sciences to sell products that misappropriated Swedish Match’s trade secrets, the complaint states.

    In November 2020, BAT—which owns Modoral’s parent company Reynolds American—bought Dryft Sciences’ nicotine pouch business and its product line.

    After Swedish Match informed BAT that it owned the U.S. patent and other trade secret information, Modoral filed a declaratory judgment action for noninfringement and also sought invalidity of the patent as well as for no misappropriation of Swedish Match’s trade secrets, the complaint states.

    On Jan. 19, U.S. District Judge Stanley Blumenfeld Jr. entered partial judgment in favor of Modoral, finding that Swedish Match couldn’t establish that Modoral’s accused product infringed any of the asserted claims of the patent.

    In their trial briefs filed earlier this month, Modoral and Kretek both argued that Swedish Match can’t sustain its trade secret misappropriation claims because its alleged trade secrets aren’t actually secret.

  • Swedish Match Calls Post-Takeover Meeting

    Swedish Match Calls Post-Takeover Meeting

    Photo Swedish Match

    Swedish Match will hold an extraordinary general meeting on Jan. 16 in Stockholm following Philip Morris International’s takeover of the company.

    Shareholders can register online.

    The total number of shares and votes in Swedish Match at the time of notice to the general meeting amounts to 1,525,000,000, of which 4,285,810 shares are repurchased own shares, which may not be represented at the general meeting.

    The entrance to the venue for the general meeting will open at 10:30 CET.

  • Swedish Match Applies for Delisting

    Swedish Match Applies for Delisting

    Image: Tobacco Reporter archive

    The board of Swedish Match said it will apply for delisting of the company’s shares from Nasdaq Stockholm, according to a press release. The last day of trading in the company’s shares on Nasdaq Stockholm will be announced as soon as the company has received confirmation from the exchange.

    Philip Morris Holland Holdings, an affiliate of Philip Morris International, declared the public offer for Swedish Match unconditional on Nov. 7, 2022. PMHH controls more than 90 percent of the shares in Swedish Match and has initiated squeeze-out proceedings in respect of the remaining shares in the company.

  • In the Bag

    In the Bag

    Photo: Swedish Match

    Swedish Match continues to dominate the U.S. nicotine pouch market with its popular Zyn brand.

    By Stefanie Rossel

    It’s still a fledgling industry but growing rapidly: According to the Foundation for a Smoke-free World (FSFW), nicotine pouches, also known as modern oral products, accounted for an estimated $2.38 billion, or 0.3 percent, of the global retail market in 2021. Toward the end of 2022, the segment had already achieved a value of at least $5.86 billion, estimates Market Reports World. The nicotine pouch market is forecast to expand at a whopping compound annual growth rate of 31 percent until 2028.

    Pouches appeal to adult nicotine consumers because they are discreet and spit-free. They can be used in places where cigarettes or vaping products are banned and can be disposed of in household trash after use. Of the global category volume, the five leading modern oral manufacturers jointly hold an 82.1 percent share, according to the FSFW. Swedish Match is the largest player with a share of 48.7 percent, followed by BAT (20.3 percent), Swisher International (6.4 percent), Altria Group (5.4 percent) and Japan Tobacco International (1.4 percent).

    Sweden and the United States are the largest markets for nicotine pouches. Both countries have long traditions of smokeless tobacco products. In the U.S., where the modern oral category currently accounts for 2 percent of the nicotine market, one brand sticks out: Swedish Match’s Zyn. Launched in 2016, Zyn pioneered the modern oral nicotine segment and has since experienced impressive and continued growth.

    Based on MSA data that records shipments by distributors to retail stores, Zyn could extend its U.S. nicotine pouch market share to 66.5 percent in the third quarter of 2022. According to IRI data, which measures consumer purchases based on a sample of retail stores, the brand’s market share even exceeded 76 percent during the quarter. Zyn’s penetration is particularly high in the west of the U.S., where it was first introduced.

    Boosting Production

    Zyn’s continuing success in the U.S. was one of the factors that prompted Philip Morris International to make its offer for Swedish Match. In May, PMI bid approximately $16 billion to acquire Swedish Match. To overcome opposition from activist investors, the multinational in October increased the offer price. Nevertheless, Framtiden Partnerships, which owns almost 1 percent of shares in the Swedish company, refused to accept the increased offer, saying it undervalued Swedish Match’s leading position in the fast-growing modern oral nicotine market. At the time of writing, PMI had secured 82.59 percent of Swedish Match.

    Owning a substantial stake in Swedish Match will give PMI a comfortable lead in the U.S. nicotine pouch market, where it currently has no presence. In recent years, Swedish Match has ramped up production of its nicotine pouches in the U.S. When Zyn debuted six years ago, it was available in approximately 40,000 stores in the west of the country. By the end of 2021, the product could be purchased in more than 120,000 retail outlets nationwide. Swedish Match increased Zyn U.S. shipments from 114.1 million cans in 2020 to 173.9 million cans in 2021. In February 2020, the company announced that it would raise production capacity again, enabling its factory to produce more than 200 million cans of pouches per year from 2022.

    Zyn is made from tobacco-derived nicotine and comes in a variety of flavors, among them coffee, cinnamon or citrus. In 2021, Swedish Match said it had rolled out Zyn Menthol and Zyn Chili nationwide. Nicotine pouches are regulated by the U.S. Food and Drug Administration and are subject to age restrictions, a nicotine health warning and premarket assessment.

    Swedish Match submitted premarket tobacco product applications for all Zyn products currently on the U.S. market in March 2020. The applications are currently under review by the FDA. According to Swedish Match, the applications show that almost all harmful and potentially harmful components associated with tobacco products are below detection levels in Zyn. Furthermore, consumer studies indicate that there is little interest in Zyn among users who are not current tobacco consumers and that there is a large potential to attract existing tobacco users to the products.

    Lawsuit Pending

    Despite Zyn’s dominance, the U.S. market for modern oral nicotine is highly competitive. According to Swedish Match, several companies expanded their nicotine pouch footprint in 2021. And some are even challenging the market leader in court. On Aug. 2, 2021, Dryft Sciences filed a lawsuit in the U.S. District Court for the Central District of California, claiming Swedish Match had driven it off the market with a series of sham legal actions.

    Kretek International, the largest importer, marketer and distributor of specialty tobacco products in the U.S., announced the creation of a new company, Dryft Sciences, that would focus exclusively on Dryft nicotine pouches.

    In a September 2019 statement, Kretek announced the new company intended to substantially expand its manufacturing capacity and roll out its nicotine pouch globally. It anticipated manufacturing 30 million cans of Dryft in 2020 and 60 million cans in 2021.

    Shortly after the announcement, Swedish Match initiated several legal actions: It asked the International Trade Commission to investigate Dryft for alleged patent infringements and sued the company for the same reason in the U.S. District Court for the Central District of California. Next, it filed trade secret misappropriation claims under Kentucky and federal law.

    “Because of [Swedish Match’s] actions, Dryft was never able to manufacture or sell the amount of product it reasonably anticipated it would when it issued the September 2019 press release,” Dryft Science explained in statement.

    As a consequence, the plaintiffs said, Dryft’s market value dropped significantly. On Oct. 20, 2020, Dryft Sciences sold its formulations, brands, know-how and other relevant assets—originally valued at $485 million—to BAT for $150 million. BAT has since sold the products under its modern oral nicotine brand Velo.

    Dryft Sciences requests $1.2 billion in damages. Swedish Match has not publicly commented on the lawsuit, and its financial report for the third quarter of 2022 made no reference to the case.

    Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.