Philip Morris to buy Swedish Match

Cigarette manufacturer Phillip Morris buys snus manufacturer Swedish Match. A major step for global harm reduction, according to many international commentators.
"Hopefully this will lead to easier access to harm reduction products for consumers outside Sweden and the US" says Sudhanshu Patwardhan, MD

On Monday it was announced that PMI, Philip Morris International, is buying the Swedish snus manufacturer Swedish Match. As Vejpkollen previously reported the deal has been in the works since spring. It is now a reality after PMI bought 82.5 percent of the shares in the Swedish company. Originally, PMI was to secure a larger share, but now chooses to go ahead with the purchase anyway. The price per share landed at SEK 116.

Want to go smoke-free

PMI has previously shown great interest in Swedish Match, or rather snus and the distribution of smokeless nicotine products. This interest has grown stronger since PMI declared that it wants to reduce its sales of cigarettes and smoking tobacco, in favor of smoke-free products.

"Today, 30% of PMI's revenue comes from smoke-free products. The goal is for everything to do so. But it will happen gradually, by 2025 it will be 50%." said PMI Nordic Science Editor Claude Guiron to Vejpkollen earlier this year.

Changing an entire industry

Snus, along with e-cigarettes, nicotine pouches and heat-not-burn products, will be at the heart of PMI's strategy to achieve this goal. And according to Claude Guiron it is about broadening its product portfolio while challenging the rest of the industry to do the same. Simply stopping selling cigarettes is not sustainable, at least not today.

"The problem is that if we stop selling cigarettes, someone else will sell them instead. So it's not very likely that someone will stop selling cigarettes overnight. We need to change a whole industry. Then it's about phasing out smoking. Smoke-free products will have to take more space little by little" said Claude Guiron to Vejpkollen in January 2022.

Wanted to avoid cigarette companies

PMI's purchase of Swedish Match has met with some criticism, not least because Swedish Match already owns a large part of the distribution of nicotine pouches and snus in Sweden. The risk of monopolization and distorted competition have been the main arguments. Nonetheless both the European Commission approved as Swedish The FSA approved the deal earlier this year. 

The deal has also been criticized by several strong shareholders who believe that the bid was too low. Others believe that Swedish Match should continue to work on their own launch snus and nicotine pouches globally, without interfering with cigarette manufacturers.

"A big step for harm reduction"

At the same time, many international commentators and activists are praising developments in the field of tobacco harm reduction, where snus, together with e-cigarettes and heat-not-burn technology, are seen as important tools to reduce the harm of smoking and nicotine use. The British doctor Sudhanshu Patwardhan sees the merger between PMI and Swedish Match as a major step in the right direction

"Hopefully this will lead to easier access to harm reduction products for consumers outside Sweden and the US. 80% of smokers live in low and middle income countries and they are often forgotten when we look at the market for new nicotine products," he adds. Snusforumet, the magazine of the Swedish Snus Manufacturers' Association.

Money and innovation

Phillip Morris can combine its vast assets and logistics with Swedish Match's innovative spirit, says Sudhanshu Patwardhan. And that could lead to a huge shift, on a global scale, in both the debate around, and access to, harm reduction.

"PMI is already a leader among tobacco companies in minimizing harm to smokers. The big test will be to spread products like snus to the countries where smoking is most prevalent. There, availability, combined with political will to introduce harm reduction measures, can make a big difference," he says.

Keeping name and base in Sweden

Swedish Match snuff history began in 1915 when the state-owned Svenska Tobaksmonopolet AB (STAB) was founded. In the 1900s, STAB merged with the match manufacturer Svenska tändsticksaktiebolaget and became part of the Procordia group. In 1992, Procordia changed its name to Swedish Match. Today, the company has 7500 employees and will continue to be called Swedish Match and be based in Sweden, promises PMI CEO Jacek Olczak.

Other Sources for this article:
Drugnews: Philip Morris completes purchase of Swedish Match



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