Tobacco.org

• Swedish Match under fire in secret snus substance investigation  

Tobacco company Swedish Match has been accused of adding a substance to moist snuff or 'snus' to purposely increase user dependency and, in turn, boosts sales of their products.

Since 2005, the company has introduced eight new snus products with higher than average nicotine levels.

The usual level for snus is eight milligrams per gram. In one product, levels have almost doubled that figure.

”Certain consumer groups have shown demand for a high nicotine content,” the company’s production director Torbjörn Åkeson explains.

Allegations that the company adds a substance, known as E500, to purposely increase the amount of so-called ‘free’ nicotine – which increases dependency – are presented in a new report by investigative news programme Kalla Fakta. . . .

Yet, Professor Greg Connolly at the Harvard School of Public Health believes that Swedish Match is consciously using the substance to increase addiction and their profits.

”In a study in 2008 he concluded that we are manipulating the pH value, something that we consider hugely speculative,” Brehmer adds.

”It never led to demands from any authority that we need to change something.”

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• Swedish Match soars on bid talk 

Swedish Matchrose sharply on Friday afternoon on speculation Philip Morris of the US was planning a bid.

The shares initially rose as much as 9 per cent but the stock fell back to close 3.8 per cent higher at SKr151.50.

An analyst in Stockholm, quoted by Reuters, noted this was not the first time the two tobacco groups had been linked. But he added: “Given the consolidation in the tobacco industry and given the size [of Swedish Match] you wouldn’t rule it out.” Swedish Match declined to comment.

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• Tobacco regulation could lead to more competition 

One of the real tests of how federal regulation will affect tobacco use could be something you'll spot at a convenience store counter.

A new law signed by President Barack Obama yesterday will, among many changes, move all tobacco products -- snuff and cigars as well as cigarettes -- behind the counter.

How they share space back there could clear the way for more competition in a market now dominated by Henrico County-based Altria Group Inc.

It's competition that Chesterfield County-based Swedish Match North America is hoping for, and a rule it believes could lead to something it's long wanted: more space on retailer's shelves for its snuff and chewing tobacco.

"It's back to old fashioned blocking and tackling, how to be more competitive -- including against cigarettes," said Gerry Roerty, Swedish Match's president and general counsel.

Both Richmond-area tobacco companies broke with most of the rest of the tobacco industry in supporting the regulation of tobacco by the U.S. Food and Drug Administration. . . . .

"This puts Philip Morris absolutely in control of the American market," said Alan Blum, director of the Center for the Study of Tobacco and Society at the University of Alabama. "This means Marlboro is king."

It is also likely to make oral tobacco -- snuff and similar products -- a major public-health issue, he said.

Swedish Match thinks regulation could open up the market, especially for its oral tobacco, Roerty said.

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• ROERTY: Tobacco Regulation Opens Better Communications Opportunities  

Swedish Match North America is a Richmond-based company that has been in the smokeless tobacco business in the United States for more than 100 years -- our brands include Red Man chewing tobacco and Timber Wolf and Longhorn moist snuff. . . .

Swedish Match supports meaningful and effective regulation of its tobacco products, believing that manufacturers and regulators should provide consumers with information about tobacco products, so that consumers can make educated choices about which products to purchase.

It is our belief that the FDA bill, which we supported, calls for a regulatory scheme that, if appropriately implemented and administered, would allow adult tobacco consumers to make such choices. . . .

Swedish Match is prepared to work closely with retailers to make sure that adequate, visible shelf space is maintained to allow adult tobacco consumers to make educated choices about which product they want to purchase. By doing so, our company believes that retailers have the greatest opportunity to experience continued growth of the moist snuff category.

In summary, while Congress has completed its work on federal tobacco legislation, the FDA will have to go through an extensive process to establish the specific rules that govern the production, sale, and marketing of smokeless tobacco, cigarettes and roll-you-own tobacco.

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• Ask SAM 

Q. An ad in Monday's Winston-Salem Journal, paid for by the North Carolina Taxpayers Alliance, urged readers to call state Sens. Linda Garrou and Pete Brunstetter to "take a stand" against higher tobacco taxes. Who is behind this alliance? -- K.O.

A. The members of the alliance, according to the Raleigh News & Observer, are tobacco interests: tobacco companies Reynolds American, Lorillard, Universal Leaf and Swedish Match; the N.C. Tobacco Growers Association; and the Cigar Association of America. The alliance is running ads in several newspapers across the state

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• The Original Swedish Snus by Swedish Match North America Launches Brand New Website 

Swedish Match North America asks: Are you interested in a modern smokeless tobacco product? Are either you or a loved one a cigarette smoker who is looking for a change? The original Swedish Snus by Swedish Match North America just launched a bold new website full of information. General Snus is a premium, smoke-free tobacco product that can be enjoyed discreetly anytime, anywhere.

Invented by the Swedes over 200 years ago, Snus is an effective alternative to more traditional smoked tobacco. Scientifically shown to be a less harmful alternative to cigarette smoking, Snus allows users to enjoy tobacco without emitting harmful second hand smoke or falling victim to public smoking bans.

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• Swedish Match and Philip Morris International announce global joint venture to commercialize smokefree tobacco products 

Swedish Match AB [publ] and Philip Morris International [NYSE/Euronext Paris: PM] (PMI) today announced that they have entered into an agreement to establish an exclusive joint venture company to commercialize Swedish Snus and other smokefree tobacco products worldwide, outside of Scandinavia and the United States.

The joint venture will utilize the strong combination of Swedish Match’s product development and manufacturing expertise in the smokefree category and PMI’s extensive sales and distribution infrastructure to develop business opportunities worldwide. Under the agreement, each company will own a 50% stake and will license their respective trademarks and intellectual property to the joint venture.

“PMI is the ideal strategic partner for Swedish Match in the smokefree category. This agreement provides us with the opportunity to bring our quality products to consumers across a broader geography,” said Lars Dahlgren, Swedish Match President and CEO. “The smokefree category has demonstrated substantial growth in Sweden and Norway over a number of years and we believe that smokefree tobacco products, and especially Swedish Snus, have potential outside of their current markets.”

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• Swedish Match Hires Motorbike Champ Rickardsson for East Europe 

Swedish Match AB, the Swedish maker of smokeless tobacco, hired former world speedway champion Tony Rickardsson to head its eastern European operations, marrying two of Sweden’s favorite pastimes: snuff and motorcycle racing.

The 39-year-old Swede, who won six motorbike speedway world titles between 1994 and 2005, will join the Stockholm-based company in October after driving for his own team in the Porsche Carrera Cup car racing series, Swedish Match said today.

As area manager of the company’s eastern European region, Rickardsson will be responsible for selling Cricket lighters, Korona matches and Macanudo cigars in countries such as Russia and Ukraine. Swedish Match, which has sponsored his racing career since the start of 2002, is seeking to expand beyond Scandinavia, where it gets 42 percent of revenue.

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• Philip Morris, Swedish Match to Sell Snuff Globally (Update2)  

Philip Morris International Inc., the world’s largest publicly traded tobacco company, will link up with Swedish Match AB to sell snuff globally as restrictions on cigarette use lead to increased demand for smokeless products.

Both companies will license their trademarks to a joint venture, which will sell Swedish snuff, known as snus, and other smokeless tobacco products worldwide outside of Scandinavia and the U.S. Swedish Match shares rose as much as 4 percent.

Snus is “recognized by many in the scientific and public health community to be significantly less harmful than cigarette smoking,” the companies said today in a statement. Snuff is the main profit contributor for Swedish Match, which faces tougher competition at home and in the U.S. after Altria Group Inc. and British American Tobacco Plc bought snuff makers last year.

“This can be a very interesting proposition for Asia and possibly parts of Africa,” Swedish Match Chief Executive Officer Lars Dahlgren said in a phone interview today. “This is a long term commitment. We will not do it overnight.”

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• Coming to America 

In 2003, Swedish Match built a snus production facility in Kungalv, Sweden, with a capacity of 60 million cans per year, to better serve the country’s 240-million-can snus market. Recently, the company announced an investment of SEK265 million ($43.7 million) to increase production capacity to 100 million cans by 2010. Swedish Match clearly believes in the potential of its product. The company has a 90 percent market share in Sweden and Norway, and its General brand has dominated those markets for decades. Its most recent investment indicates the company’s commitment to taking its product beyond current markets in a big way.

Swedish Match’s CEO, Lars Dahlgren, says smoking bans and regulations have created more “usage opportunities” for smokeless tobacco products. “And those trends are basically true in the entire world,” he says. “So I think smokeless is a product category with a future.” . . .

After testing the American waters in a limited deal with Lorillard, Swedish Match can enter the U.S. market with nine different varieties of snus, with different flavors, strengths and blends. The company is well positioned for the move. It spent the past several years restructuring its cigar and lighters operations and making acquisitions that added to the bottom line. Today, the company is in good financial position, unaffected by the world’s current financial volatility, says Dahlgren.

Swedish Match understands that launching a new tobacco product in the U.S. will not be easy in the current social and regulatory climate. The U.S. Congress is expected to give the Food and Drug Administration authority to regulate tobacco products, a move that could result in additional product and marketing restrictions.

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• Swedish Match may spark a bid after Altria move  

Swedish Match, the last independent smokeless tobacco group, may attract a bid from a cigarette maker after Altria's bid for UST is set to make the United States snuff market more competitive.

While cigarette smoking in the mature markets of western Europe and the United States is declining, snuff consumption is rising in the U.S. driven by the perception it is not as harmful as cigarettes, prompting two takeovers in the last two years. . . .

With the two biggest snuff makers in the U.S. market being bought by big tobacco groups, the third -- Swedish Match -- may be next. Some analysts tip the third-largest U.S. cigarette maker Lorillard Inc, which unlike some potential buyers already has a large distribution network in the country, as a front-runner.

"I think that Lorillard could want to buy Swedish Match.

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• Swedish Match checking tobacco-free snus complaints 

Tobacco products firm Swedish Match said on Tuesday it was investigating whether its tobacco- and nicotine-free snus product could cause cavities after dentists contacted the firm.

Swedish Match's biggest and most profitable product, snus, is a wet tobacco snuff that is placed under the upper lip. In 2006 the firm launched tobacco-free snus in Sweden, the world's biggest snuff market per capita.

Freddi Lewin, health advisor at Swedish Match, said the company had been contacted by two dentists in the past month saying patients using the product had developed cavities, and also by consumers with similar concerns.

The firm said it was taking the information seriously and had initiated an analysis of the production and the ingredients of the product, Onico, which is based on corn fibre.

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• Red Man Moist Snuff Delivers! 

Swedish Match, the fastest growing moist snuff company in the US, announced the launch of Red Man Moist Snuff, the latest product to carry the most recognized brand name in smokeless tobacco. This follows a successful test market launch last year in 11 states, which represented 36% of the moist snuff category volume. "Consumer acceptance of Red Man Moist Snuff in the test markets was overwhelming," according to Elliot Eliades, Director of New Product Development for Swedish Match North America. "Through event marketing, retail intercept and website driven sampling we accelerated consumer trial by quickly getting 'cans in hands'. Early awareness scores indicated that Red Man Moist Snuff created significant consumer buzz."

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• Swedish Match Q4 beats forecasts, CEO to go 

Swedish Match reported quarterly pretax profits slightly above market expectations on Wednesday, sending its shares up, and said its chief executive would step down this year.

The tobacco products maker forecast higher sales and operating profits in 2008 after fourth-quarter pretax profit rose 14 percent to 976 million Swedish crowns ($154 million), beating a mean forecast of 956 million in a Reuters poll.

But margins for its biggest and most lucrative product, snuff -- a wet tobacco sold mainly in the United States and Scandinavia but banned elsewhere in the European Union -- fell short of expectations. Operating margins at the division shrank to 45 percent from 48 versus an expected 46.7 percent.

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• EU Panel Says Oral Tobacco Is Addictive, Hazardous (Update1) 

Swedish-style snuff hasn't been proven to help people quit smoking, a European Union panel said, dealing a blow to tobacco companies that lobbied for lifting a ban on the product.

Smokeless tobacco is addictive and hazardous to health, the committee said in a report on its Web site. Evidence that the snuff, known as snus, may help Swedish smokers stop isn't sufficient to lift an EU ban because it's ``not possible to extrapolate the patterns of tobacco use'' to other countries, the committee said. . . .

``This conclusion implies that there will be no impetus for a change in policy for a lifting of the ban,'' wrote David Hayes, an analyst at Lehman Brothers who has an ``overweight'' rating on Swedish Match.

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