Swedish Match

From TobaccoTactics
Share/Save/Bookmark
Jump to: navigation, search
Image 1:Swedish Match General snus

Background

Swedish Match is a Swedish tobacco company that manufactures and sells snus (image 1), moist snuff, cigars, chewing tobacco, and matches.

The company used to sell cigarettes, but decided in 1999 to divest its cigarette business to Austria Tabak.[1] Lennart Sundén, then President and CEO of Swedish Match, said at the time:

“Cigarette consumption, the industry’s most dominant source of revenue, is declining or has reached a plateau in most Western countries. For Swedish Match therefore, the divestment of our cigarette operations was a natural step. We were a strong player in local markets, but a very small player compared with our main competitors.”[2]

Market Share

Swedish Match’s markets for snus, its main product, are Sweden, Norway and the United States (US), although the company aspires to become the "global smokefree leader".[3]

In Sweden and Norway, the company has been gradually losing market share following the entry of transnational tobacco companies on the Scandinavian snus market.[4] The table below (based on data from market research company Euromonitor International[5][6]) shows a significant decline in market share over the last decade, with Imperial Tobacco becoming its main competitor.

Company Sweden

2007

Sweden

2016

Norway

2007

Norway

2016

Swedish Match 93.3% 67.2% 87.4% 57.0%
British American Tobacco 0.5% 7.9% 2.9% 1.9%
Imperial Tobacco 1.7% 16.9% 7.4% 36.1%
Japan Tobacco International 1.3% 6.6% - -
Small independent manufacturers 2.6% 1.4% 1.4% 5.0%

In the US, Swedish Match remains the third biggest manufacturer of snus and moist snuff with a 8% market share in 2016, and its main competitors being market leader Altria, and Reynolds American (since 2017 wholly owned by British American Tobacco).[7]

Key Brands

The company's key snus brands are:[8]

Sweden - General, Catch, Göteborgs Rapé, Ettan, Grov, Kronan, and Kaliber.

Norway - General, General G.3, The Lab, Nick & Johnny

US – General

Similar to cigarettes, snus brands are available in different price segments, in particular premium and value price categories.

Employees/Board Members: Past and Present

In June 2008 Lars Dahlgren became the Chief Executive Officer (CEO) of Swedish Match.

A full list of the current company’s Board of Directors can be accessed here and the current management team here.

Other persons that work(ed) for the company:

Markus Ersmark | Johan Gabrielsson | Tomas Hammargren | Cecilia Kindstrand | Lars Olof Lofman | Lars-Erik Rutqvist

Partnerships and Affiliations

Lorillard

In 2006 Swedish Match entered into a joint venture with Lorillard (the third largest cigarette manufacturer in the US at the time) to develop Swedish-style snus for the US market,[9] but this joint venture was terminated at the end of 2009 following unsatisfactory results.[10]

Philip Morris International

In February 2009 Swedish Match entered into a joint venture with Philip Morris International (PMI) to "commercialize Swedish snus and other tobacco products worldwide, outside of Scandinavia and the United States".[11] This joint venture was dissolved in 2015, allegedly because of lack of demand for snus in the test markets.[12]

European Smokeless Tobacco Council

In 1989, Swedish Match (then known as Svenska Tobaks), co-founded the lobby group European Smokeless Tobacco Council (ESTOC).[13]

In 2017, ESTOC no longer appeared to be active.

Eliminating Child Labour in Tobacco Growing Foundation

Swedish Match is a member of the Eliminating Child Labour in Tobacco Growing Foundation (ECLT).[14] In addition to Swedish Match, ECLT Board members include the International Tobacco Growers Association, British American Tobacco (BAT), Imperial Tobacco, Japan Tobacco International (JTI), and PMI, amongst others.[14] The ECLT has a partnership with the International Labour Organization (ILO), a United Nations (UN) agency, focussed on issues related to labour such as international labour standards, social protection and unemployment.[15]

NordCham Philippines

The company is member of NordCham Philippines, reportedly the largest Nordic Chamber of Commerce in the Asian Region.[16] Swedish Match has owned a factory that produces lighters in Manilla since 2007.[17]

Controversial Marketing Strategies

Targeting Youth in Russia

In June 2012, marketing firm Proximity Russia posted promotional materials online that they had produced for SMPM International, the joint venture of Swedish Match and PMI. The company had been asked to develop promotional materials to aid the launch of Parliament snus in Russia, with the promotional materials including so-called “youth engagement materials”.[18] For details and images of this controversial campaign, go to Snus: Marketing to Youth.

Image 2: Swedish Match employees used online snus user forums to directly communicate with customers (screenshot www.snuscentral.org, accessed 24 February 2011)
Image 3: Swedish Match Vice President Scientific Affairs was a columnist for an online snus user community (screenshot www.snuscentral.org, accessed 3 April 2012)

Promoting Tobacco Use via Social Media and Online Forums

A 2010 peer-reviewed study demonstrated that, in light of increasing tobacco advertising restrictions, Swedish Match had turned to YouTube and other social media to market its products, with none of the company’s YouTube videos including adequate safeguards to prevent under-age viewing.[19] A 2011 social network analysis further demonstrated that Swedish Match employees had been active on Facebook, with Swedish Match employee Markus Ersmark at the centre of an elaborate network of snus manufacturers, snus retailers, and pro-snus bloggers generating pro-snus content.[20]

Swedish Match also used to directly contribute to online consumer forums to promote the company, its products and pro-snus messages (see images 2 and 3). The company used to have a ‘Ask the Manufacturer’ column on the American snus consumer forum SnusCENTRAL.org. In 2009 and 2010, Ersmark and a colleague directly responded to consumer questions about Swedish Match products and snus use in general. Over a period of eight months, the duo responded to 31 consumer questions, started one thread themselves, and in total posted 56 messages.[21]

Influencer Marketing: Hospitality for Pro-Snus Bloggers

In addition to being directly active on social media, Swedish Match have engaged in ‘influencer marketing’ in which the marketing occurs indirectly through key influencers online.[22] The company actively nurtured relationships with key pro-snus bloggers (of which some labelled themselves ‘snus ambassadors’) through providing hospitality and free sample products.[23] For example, in 2012 Swedish Match hosted a so-called “summit” for American snus bloggers in Washington DC.[24] A year earlier, the company hosted a delegation of American and British snus bloggers in Stockholm, visiting Swedish Match headquarters and factories, as well as a Tobacco Museum.[25] In May 2010 two American bloggers visited Sweden, courtesy of Swedish Match, as was the case in 2009.[26]

Some bloggers received regular free snus samples from Swedish Match and then reviewed the products online, including British blogger Tim Haigh. Haigh and Swedish Match later became involved in a controversy which saw researchers from the Tobacco Control Research Group receive verbal abuse over a peer-reviewed article which highlighted that snus was being sold illegally across the EU via the Internet, contravening three EU Directives and Swedish national legislation.[27] For more information see our page on FOI: University of Bath.

Failed Legal Bid to Stop Plain Packaging in Norway

In December 2016, the Norwegian Parliament approved plain packaging legislation on cigarettes and snus. Swedish Match sought an injunction from the Oslo County Court to delay the legislation, arguing that the Norwegian government was in breach of the free European Economic Area (EEA) trade rules and that the intervention (plain packaging of snus boxes) was not in proportion to the health risks associated with snus.[28]

In November 2017 the court rejected the Swedish Match claims, ruling that plain packaging was “an evidence-based and internationally recommended measure” adding that it was “a legitimate measure in line with the EEA Agreement”.[29] The court also ruled that snus is harmful to health, and that plain packaging will contribute to the protection of public health, particularly of children and young people.

Swedish Match was ordered to pay the legal costs of the Norwegian Government.

  • Litigation is a well-known tactic of tobacco companies to stop or delay tobacco legislation. For more information go to Challenging Legislation.

Tactics to Subvert the Europe-Wide Snus Sales Ban

In 1992, sales of snus were banned in Europe, following an aggressive attempt by the US Smokeless Tobacco Company to introduce smokeless tobacco to several European markets in the mid-1980s.[4] From 2001 the EU snus sales ban has been included in the European Union (EU) Tobacco Products Directive (TPD), which was reviewed in 2014. The snus ban severely limits the growth potential of Swedish Match in Europe, and the company has been attempting to lift the snus ban in the last decade using multiple tactics. The two main platforms of the company’s opposition to the snus ban are free trade and harm reduction.

In a submission to the 2010 public consultation that was part of the TPD review, Swedish match claimed that banning snus “denies 106 million smokers in the EU access to a traditional and non-combustible tobacco alternative to their cigarette”. [30] The company further ‘reminded’ the Commission of the need for EU legislation to respect the principles of EU Better Regulation and that there should be a “non-competitive regulation or tobacco and nicotine products” which would not create internal market distortions.[30]

Directly and Indirectly Lobbied Commission Officials

Swedish Match lobbied DG SANCO (Health Directorate-General), and to a larger extent, non-health elements of the Commission, in particular the Secretariat General (responsible for Better Regulation and impact assessments), the Cabinet of the Regional Policy Commissioner Hahn, and DG ENTR (Enterprise and Industry Directorate-General).

Some of the meetings were facilitated by PR firm Kreab Gavin Anderson. Twice the company was accompanied by Revolving Door case Karin Riis-Jørgensen, a Danish former MEP and senior advisor of Kreab Gavin Anderson.[31]

Murky Lobbying Practices Exposed: 'Dalligate' and Untrue Version of Events

On 16 October 2012, EU Health Commissioner John Dalli was forced to resign following an investigation by EU’s anti-fraud office, OLAF, into bribery claims made by Swedish Match. For more detail on this controversy, labelled by some as 'Dalligate' or Barrosogate', visit the pages TPD: Dalligate and TPD: Dalligate Timeline.

The scandal, besides raising questions about the transparency around EU policy making, also exposed the murky lobbying practices of Swedish Match in its attempts to have the snus ban lifted. Evidence showed that the company had inappropriately sought access to Dalli in his private sphere in Malta via Gayle Kimberley, a Maltese lobbyist not registered at the EU Transparency Register. Swedish Match’s Director of EU Affairs, Johan Gabrielsson, one of the people at the centre of the scandal, confirmed in a statement to OLAF on 2 June 2012[32] that Swedish Match had paid the lobbyist €5,000 to gain access to Dalli and feed him information that would help shape the evidence base on snus in favour of the company’s interests.

The company intentionally hid its relationship with Kimberley who, following a meeting with Dalli in January 2012, reported to Gabrielsson that “the meeting was CONFIDENTIAL and I was in no way representing SM [Swedish Match] just giving the objective position of snus producers and users!”.[33]

In the aftermath of the scandal, Swedish Match publicly lied at several occasions suggesting that Kimberley had met Dalli TWICE, the first time in January 2012 and the second time in February 2012 when the alleged bribery attempt had supposedly been made. In an interview following Dalli’s shock resignation, Swedish Match Vice President of EU Affairs, Patrik Hildingsson, recalled:

“There was a first meeting with Dalli in early January and a second one in February to hand over WHO science on snus. After this meeting she [lobbyist] sounded very upset, saying the meeting was derailed and went in a very odd direction. She told us that during the meeting Dalli had explained that all arguments behind the snus ban were actually in favour of Swedish Match. Then he said that, however, as a health commissioner, his political career would be over if he lifted the ban on snus. He said, according to the feedback I got, that it would be a political suicide to lift the ban. Then he left the meeting and we were alone with a man, an entrepreneur. He was supposed to be a friend of Dalli and did not have any relationship with Swedish Match. He continued the meeting and asked why Dalli would take a suicidal political decision without gaining anything. The solution was simple: we had to pay.”

However, when Hildingsson shared this version of events with the media, Swedish Match had already been informed by OLAF that Kimberley had lied about her presence on this supposed second meeting.[34] The second meeting between the lobbyist and Dalli had not taken place. Gabrielsson later accused OLAF of advising him to stick to an untrue story of events: “I never lied. I just said what I had been told [by OLAF]. That’s not a lie”.[34]

OLAF has denied allegations that it asked Swedish Match to skew the evidence and the Commission has indicated that it will not pursue this any further.

Image 4: Online monthly diary page of Swedish MEP Christofer Fjellner, showing a listed meeting on 10 September 2010 titled (translated in English) "Speak with snus manufacturer Swedish Match" (screenshot taken 30 March 2012)

Lobbying Members of European Parliament

In January 2013, Swedish Match was a keynote speaker at a Parliamentary event organised by the Brussels Network. MEPs Christofer Fjellner, Syed Kamall and Alexander Graf Lambdorff organised a meeting with tobacco as the agenda item, with Swedish Match given their version of their involvement in 'Dalligate'.[35] On this occasion, Swedish Match also stuck to the untrue version of events regarding the number of times their lobbyist met Dalli.[34]

Challenging the Snus Ban in Court

In 2016 Swedish Match requested a judicial review of the snus ban in the UK High Court, which was approved on 26 January 2017. The case was referred to the European Court of Justice. In its legal challenge, the tobacco company has been supported by the New Nicotine Alliance UK (NNA), who requested the Court to make its own submission to provide a “customer perspective on the ban and on the benefits that will follow if the ban is lifted”.[36] Gerry Stimson, a vocal advocate of tobacco harm reduction, is a Board member of the NNA.

Close relationship with Swedish Politicians

In the past, Swedish Match enjoyed a good relationship with Swedish politicians, including Swedish Member of European Parliament (MEP) Christofer Fjellner, who promoted a pro-snus agenda in the European Parliament and was a vocal advocate for removing the EU ban on snus sales.[37] Shortly before Fjellner launched a petition in 2010 to mobilise opposition to the EU snus ban, Swedish Match had two meetings with the MEP (see image 4).[38]

Swedish Match also claims a "close relationship between industry and government" in Sweden.[39] Indeed, the Swedish Government supported Swedish Match's call for a removal of the EU snus ban, regarding it a violation of free trade principles rather than a public health issue[40][41][42], an argument first voiced by Swedish Match.[43]

Image 5: Screengrab Swedish Match Annual Report 2009

Corporate Social Responsibility (CSR): Boosting Corporate Reputation

A 2011 news article in Tobacco Control pointed to Swedish Match as an example of tobacco industry philanthropy, where positive publicity was generated with little upfront community investment.[44] The tobacco company’s 2009 annual report revealed that “Australia [had] suffered the country’s worst wildfire disaster in a quarter of a century” and in response the tobacco company had contributed to “Emergency Relief’ by giving a “cash donation” to the Australian Salvation Army (image 5). The company stopped short of disclosing the amount of money donated.

When the authors contacted the Australian Salvation Army and asked about the size of the donation, a spokesperson for the Charity confirmed that Swedish Match had donated AU$500 (approximately £256). The donation had presented only one ten thousandth of a per cent of the company's operating profit.[44]

Funding Science and Scientists

Image 6: Screengrab of funding disclosure of the University Of Louisville’s Endowed Chair in Tobacco Harm Reduction Research, undated, March 2015

For several years, Swedish Match North America was a financial donor to the University of Louisville's Kentucky Research Challenge Trust Fund (also known as ‘Bucks for Brains’).[45]

From 2005 to 2008, Swedish Match spent half a million US dollars to fund the University's Endowed Chair in Tobacco Harm Reduction held by Brad Rodu (Image 6).[46] Rodu has been a vocal supporter of lifting the EU ban on snus.[47]

The tobacco industry has historically used science to oppose tobacco regulation and bias public opinion in favour of the tobacco companies.

Failed to Have Snus Certified as a Harm Reduction Product

In April 2015, the advisory panel of the US Food and Drug Administration (FDA) rejected Swedish Match’s application to alter the health warnings of 10 variants of its General snus and claim snus is less harmful than cigarettes.[48]

The panel concluded that the company had not provided enough evidence to support that The Swedish Experience could be replicated in the US, and had not sufficiently tested the proposed new health warning to ensure consumers would understand it and interpret it.[48]

In December 2016, the FDA upheld the panel’s advice although it encouraged the company to amend their application and submit more evidence to support their claims.[49]

To read more about tobacco harm reduction, click here.

TobaccoTactics Resources

Relevant Link

Swedish Match website

TCRG Research

Notes

  1. Swedish Match, Swedish Match to sell the cigarette business to Austria Tabak for MSEK 4,800, Press Release 31 May 1999, accessed November 2017
  2. Swedish Match, Swedish Match 1999 Annual Report, accessed November 2017
  3. Swedish Match, Company Presentation: Who we are, What we do. 21 July 2010, accessed November 2017
  4. 4.0 4.1 S. Peeters, A. Gilmore, Transnational Tobacco Company Interests in Smokeless Tobacco in Europe: Analysis of Internal Industry Documents and Contemporary Industry Materials, PLoS Med 10(9): e1001506, 2013
  5. Euromonitor International, Company Shares Sweden Smokeless Tobacco Market by Retail Volume (% breakdown), 2007-2016
  6. Euromonitor International, Company Shares Norway Smokeless Tobacco Market by Retail Volume (% breakdown), 2007-2016
  7. Swedish Match, Market Development, last updated 24 March 2017, accessed November 2017
  8. Swedish Match, Snus and moist snuff, last updated 24 March 2017, accessed November 2017
  9. Swedish Match, January-September 2006 Interim Statement, accessed November 2017
  10. FD (Fair Disclosure) Wire, Conference Call Transcript with Lorillard Executives at the Morgan Stanley Consumer & Retail Conference 16 November 2010
  11. Swedish Match, Swedish Match and Philip Morris International announce global joint venture to commercialize smokefree tobacco products, Press Release 3 February 2009, accessed November 2017
  12. Swedish Match, Swedish Match and Philip Morris International to dissolve smokeless joint venture, Press Release 16 July 2015, accessed November 2017
  13. US Smokeless Tobacco, Note from John Walter to Per Erik Lindqvist enclosing legal brief on European Smokeless Tobacco Council, Truth Tobacco Industry Documents, 16 February 1989, Bates no: USTC4322097-USTC4322109, accessed November 2017
  14. 14.0 14.1 The Eliminating Child Labour in Tobacco Growing Foundation, ECLT Foundation Governance, 2017, accessed November 2017
  15. International Labour Organization, Mission and impact of the ILO, 2017, accessed November 2017
  16. NordCham Philippines, Members, 2016, accessed November 2017
  17. Swedish Match, Cricket gears up in the Philippines, 4 August 2008, accessed November 2017
  18. S. Peeters, K.Evans, Russia: snus targeted at young & wealthy, Tobacco Control, 2012; 21:456-459
  19. A. Seidenberg, V. Rees, G. Connolly, Swedish Match marketing on YouTube, Tobacco Control 2010, 19;512-123
  20. S. Peeters, A. Clements, A. Gilmore, How the Internet undermines EU tobacco control legislation: online snus marketing & promotion. Presentation at the 15th World Conference of Tobacco of Health, Singapore. 21 March 2011
  21. M. Ersmark & J. Blom, Ask Swedish Match, messages posted from 8 August 2009 to 8 April 2010, accessed May 2012
  22. Influencer Marketing, Marketing-Schools.org, 2012, accessed November 2017
  23. L. Waters, Swedish Match XRANGE Snuses Released and Why?, SnusCentral.org, 30 March 2015, accessed April 2015
  24. M. Hellwig, The Swedish Match Snus Summit- My Reflections, SnusCentral.org, 1 October 2012, accessed March 2015
  25. M. Hellwig, The most exclusive snus in the world, 2 June 2011, accessed November 2011
  26. C. Jones, Full report on the trip to Sweden and visit with Swedish Match! 31 May 2010, 31 May 2010, accessed June 2012
  27. S. Peeters, A. Gilmore, How online sales and promotion of snus contravenes current European Union legislation, Tobacco Control, 2013; 22:266-273
  28. Swedish snus company sues Norwegian state over neutral packaging, thelocal.no, 25 September 2017, accessed November 2017
  29. Norwegian Government, Full victory to Norway over snus producer Swedish match, Press release 6 November 2017, accessed November 2017
  30. 30.0 30.1 C. Kindstrand, Swedish Match Industry Submission to the public consultation on the possible revision of the Tobacco Products Directive 2001/37/EC, page 2462 of 3697, 2010, accessed November 2017
  31. European Commission and OLAF European Anti-Fraud Office, Replies to the Questionnaire from the Committee on Budgetary Control of the European Parliament concerning the resignation of the former Commissioner John Dalli, 30 November 2012
  32. European Anti-Fraud Office, Written Record of Interview with Mr Johan Lenmart Gabrielsson, conducted 2 June 2012. In: Transmission of information following a closure of investigation, Fax from Giovanni Kessler to Peter Grech, dated 17 October 2012
  33. Gayle Kimberley, Re: Meeting Commissioner. Email dated 9 January 2012 addressed to Johan Gabrielsson. In: Transmission of information following a closure of investigation, Fax from Giovanni Kessler to Peter Grech, dated 17 October 2012
  34. 34.0 34.1 34.2 Transcription of the meeting between Jose Bove MEP, Jean-Marc Desfilhes MEP Assistant, Cecilia Kindstrand-Isaksson Swedish Match, Johan Gabrielsson Swedish Match. 2013.
  35. C. Fjellner, Email to MEPs dated 17 December 2012, Subject: Brussels Network January 9: Inside Dalli-gate
  36. New Nicotine Alliance, NNA goes to the High Court to challenge the ban on snus, 19 January 2017, accessed November 2017
  37. Ewa Björling och Christofer Fjellner: Hjälp oss att rädda svensk snuskultur, Espressen.se, 5 November 2010, accessed November 2017
  38. C. Fjellner, Kalender. Fjellner’s website, accessed February 2011
  39. L. Rutqvist, The Swedish Tobacco Harm Reduction Experience. FDA-TPSAC Meeting on Dissolvable Products 18-20 January 2012
  40. Swedish Match, Swedish Match welcomes an important step to normalize trade in the EU, press release 28 November 2008, accessed November 2017
  41. C. Danielsson, Sweden's response to the public consultation on Directive 2001/37/EC of 5 June 2001 on the approximation of the laws, regulations and administrative provisions of the Member States concerning the manufacture, presentation and sale of tobacco products. 2010
  42. K. Gustafsson, Sweden Urges EU To Lift Ban On Snus Exports, The Wall Street Journal , 30 May 2011
  43. Swedish Match. Arbitrary, Unreasonable and Discriminatory, press release 3 June 2002, accessed November 2017
  44. 44.0 44.1 G. Fooks & S. Peeters, World: disasters are ‘brand aid’ opportunities for tobacco, Tobacco Control 2011, 20:4-7
  45. University of Louisville, Bucks for Brains donors, undated, accessed April 2017
  46. University of Louisville, Endowed Chair in Tobacco Harm Reduction Research, undated, accessed January 2012
  47. B. Rodu, What the EU Snus Ban Means: 290,865 Casualties Per Year, Tobacco Truth blogspot, 27 November 2013, accessed November 2017
  48. 48.0 48.1 T. Clarke, FDA panel votes against label change to Swedish Match snus, Reuters, 10 April 2015, accessed November 2017
  49. Food and Drug Administration, FDA Submission Tracking Numbers (STNs): Multiple STNs, see below, Letter to Swedish Match North America dated 14 December 2016, accessed November 2017