Swedish Match and Philip Morris to market smokeless tobacco

Swedish Match is joining forces with Swiss-based tobacco giant Philip Morris International (PMI) to market smoke-free tobacco around the world

Swedish Match and Philip Morris to market smokeless tobacco

The joint venture, announced Tuesday, will be based in the Swedish capital Stockholm.

Both firms will hold an equal stake, PMI said in a statement released in Washington.

“The smoke-free category has demonstrated substantial growth in Sweden and Norway over a number of years” Swedish Match boss Lars Dahlgren said.

“We believe that smoke-free tobacco products, and especially Swedish Snus, have potential outside of their current markets.”

‘Snus’ tobacco is a moist snuff most commonly packaged in a small tea-bag-like pouch which is placed against the users’ gum. It is widely used in Scandinavia.

Swedish Match is a leading producer of matches, lighters, and snuff, with increased sales of the company’s snus varieties helping lift profits in recent months.

PMI said the promotion of the product could help offset concerns about the health risks of smoking tobacco.

Snus has been recognized by many in the scientific and public health community to be significantly less harmful than cigarette smoking,” the company said.

The sale of some non-smoked tobacco products has been banned in the European Union since 1992, except in Sweden, which won an exception from the rules when it joined the EU in 1995.

However, the EU has maintained a ban on Swedish snus exports to other member states, despite protests from Sweden’s Trade Minister Ewa Björling, who has vowed to have the export ban.

PMI is one of the world’s biggest tobacco producers. Present in 160 countries, it makes the Chesterfield and Marlboro brands.


Illegal snus operations a growing problem in Sweden

Sweden’s status as the only country in the EU where snus is legal has created a growing underground manufacturing operation, broadcaster SVT reported on Saturday.

Illegal snus operations a growing problem in Sweden
More popular than cigarettes in Sweden, snus is a moist tobacco product either bought loose or in small parcels and placed under the lip. Its export to and sale within other EU countries is banned, and the EU has consistently opted to maintain that restriction, with Sweden granted an exception and allowed to sell the product within its borders.
But demand for snus beyond Sweden’s borders is growing. So too is the number of Swedish operations apparently willing to break the law to meet the demand by producing and selling snus in secret. According to SVT, some snus manufacturers skirt the export ban by running illegal snus sales alongside their legal activities. But the broadcaster said there is also a flourishing black market in which snus is sold under fake labels. 
“The knowledge is here since we have a long history of production. That makes Sweden a good starting point for the production of illegal snus,” Magnus Råsten of the Swedish Economic Crime Authority (Ekobrottsmyndigheten – EBM) told SVT. 
EBM has reported an uptick in illegal snus production in recent years, particularly in Gothenburg. But the agency does not have an overview of how much of the tobacco product is being manufactured and sold illegally. 
“Illegal manufacturing can in some cases be part of serious criminality but there are also manufacturers who are primarily engaged in legal activities,” Råsten said. “In contrast to drugs or weapons, it’s not as risky to get into the snus business because it is not illegal in Sweden. That also makes it harder for us to assess whether the activity is legal.” 
According to Råsten, much of the foreign demand for snus comes from Norway, Finland and Russia.
“There is a market that people want to reach,” he said. “When there is money to be made, criminality often follows.”