Cigarette Companies Investing in Snus
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Cigarette Companies Investing in Snus, Tobacco Tactics, updated 20 March 2024, accessed 18 April 2024.
As the harms from conventional products have become better understood, and tobacco control measures have been put in place, the cigarette market – from which tobacco companies make most of their profits – has started to shrink. To secure the industry’s longer-term future, transnational tobacco companies (TTCs) have invested in, developed and marketed various newer nicotine and tobacco products, including in low and middle income countries (LMICs.1
Since the early 2000s TTCs have developed interests in e-cigarettes (also known as electronic delivery systems, or ENDS), heated tobacco products (HTPs), snus and nicotine pouches. Companies have referred to these types of product as ‘next generation products’ (NGPs) although terminology changes over time.
- See the product terminology page for more details, including terms favoured by the industry.
Background
All of the ‘big four’ TTCs (BAT, JTI, Imperial Brands, and Philip Morris International) have invested in a certain type of smokeless tobacco, called Swedish-style snus.2 Snus is a key product of Swedish Match, which does not sell cigarettes. Philip Morris International acquired Swedish Match in 2022 (see below).
This page gives an overview of the global snus market, and looks at the snus products owned by TTCs. It also links to further information on their developing interests in nicotine pouches, snus type products that do not contain tobacco leaf.
The tobacco industry often uses the ‘Swedish Experience’ to support its harm reduction narrative: that Sweden experiences low rates of smoking and tobacco-related disease because snus is available in the country. However, TCRG researchers have argued that this is the result of effective tobacco control regulation, rather than being necessarily attributable to the wider availability of snus.2
This page does not cover the potential health benefits/risks of snus.
The Global Snus Market
Data from Euromonitor International shows that the global market for snus steadily increased in size by about 40% between 2008 and 2019.3
Sweden remained by far the biggest single market, accounting for nearly 70% of the global market in 2019 and around 80% of the European market.3 Over the last decade sales have grown in Sweden, Norway, and particularly in the US. Sales volumes in Norway and the US are now about a fifth of those in Sweden. Use has also been noted in other countries including Brazil and South Africa.4
However, the rate of increase appears to have been slowing in all countries.3 Tobacco companies have been increasing interest in non-leaf nicotine pouches (see below).
Regulation of Snus
In European Union (EU) countries other than Sweden, the sale of (tobacco derived) snus is illegal under the Tobacco Products Directive. TTCs have unsuccessfully tried to lift the EU sales ban on snus since 2008.56
- For more information: Snus: EU Ban on Snus Sales.
It is likely that post-Brexit, those tobacco companies with an interest in snus, as well as EU based retailers, will push for the UK government to reverse the snus ban.
A detailed summary of regulation of snus and nicotine pouches (as of April 2020) in Europe, the US, Australia and New Zealand can be found in a Policy Brief produced by The European Centre for International Political Economy.7
For information on tobacco regulation generally, see the Tobacco Control Laws website, published by the Campaign for Tobacco Free Kids (CTFK).
Cigarette Company Investments in Snus
From 2002, TTCs started buying up small Swedish snus manufacturers and developing and marketing their own snus products. After 2008, snus investments slowed down and tobacco companies focused on e-cigarettes and heated tobacco products (HTPs) instead. Since 2018, TTCs have shown renewed interest in snus-type products, in particular nicotine pouches.8
Japan Tobacco International
In 2002, Gallaher, now part of Japan Tobacco International (JTI), became the first TTC to add snus to its product portfolio in Europe by acquiring Swedish snus manufacturer Gustavus.9 Initially, JTI sold three brands of snus in Sweden only: LD in the value segment; mid-priced Gustavus; and premium Camel snus, which it launched in 2009.10 In 2013, JTI’s parent company, Japan Tobacco briefly trialled ZeroStyle snus in Osaka, Japan, but with little apparent success.11
Since 2017, JTI has been selling snus in Norway and Sweden through its wholly-owned subsidiary, Nordic Snus.12 It sells two brands: LD and Nordic Spirit, the latter being nicotine pouches.1314
British American Tobacco
In May 2005 British American Tobacco (BAT) commenced trial markets of snus in South Africa and Sweden, followed by trials in Norway and Canada, plus a “limited consumer test” in Japan.15
Then in July 2008 it acquired Swedish snus manufacturer Fiedler & Lundgren.2 Initially, BAT sold snus under cigarette brands Lucky Strike, Peter Stuyvesant, and du Maurier, and snus brands Granit, Mocca, and Knekt snus, in South Africa, Canada and Scandinavia. But in March 2011 BAT announced that it had “scaled back” its snus trial markets “to review our BAT’s approach to developing new reduced risk product categories”, and in addition, cancelled a test market planned for 2011.16
From 2012, the company sold snus in Sweden and Norway only. In 2017 BAT’s snus activity picked up again. Following its acquisition of Reynolds American Inc (RAI) in the United States (US), the company now owns Camel snus in the US. In December 2017, RAI submitted Modified Risk Tobacco Product Applications (MRTPA) to the US Food and Drug Administration (FDA) for Camel snus (see below). In Europe in the same year, BAT acquired Swedish snus company Winnington AB, adding Epok snus to its portfolio.1718
In 2019, BAT introduced nicotine pouches to its portfolio, marketing them as Lyft in the UK and Velo in the US.192021 It promoted sales across Europe, Africa and in Pakistan. For more information see Nicotine Pouches.
BAT distinguishes Epok, Lyft and Velo from traditional snus and has allocated them to a new product category, which it calls “modern oral products”.19
Imperial Brands
Imperial Tobacco (now Imperial Brands , the second largest cigarette company in Europe, entered the snus market in September 2005 when it acquired a 43% share in Swedish Skruf snus, taking full control of the company in 2008.222 Imperial has sold Skruf, its main premium brand, in Sweden and Norway, and Knox, its value brand, in Sweden only.
At Imperial Tobacco’s 2010 Investor Day, Marcus Diemer, General Manager for Central Europe North, credited snus as a “sizeable, and highly profitable business, and less vulnerable to growing regulatory pressures”.23
In May 2018 Imperial Brands, launched a tobacco-free version of Skruf, called Skruf Super White, in Sweden and Norway.24 This product appears to have been rebranded ZoneX for the UK market in August 2019.2526 For more information see Nicotine Pouches.
In its 2021 strategy review, the company announced it would stop expanding its oral nicotine market, while continuing to invest in its existing markets in Europe.27
Philip Morris International
Of all TTCs, Philip Morris International (PMI) has had the least invested in the snus product category.
In 2006 the company briefly sold 1847 by Phillip Morris on the Swedish market following the company’s acquisition of snus manufacturer Rocker Productions.28 In 2009 it sold Rocker Productions to Swedish Match as part of a deal that saw PMI and Swedish Match set up a joint venture, SMPM International, to “globalise snus”.29 However, the joint venture was not a success and was dissolved in 2015. This also ended PMI’s brief early involvement in snus.
However, in February 2021, PMI said it was planning develop a nicotine pouch product.3031 In May 2021, PMI acquired Danish snus manufacturer AG Snus, which also produces nicotine pouches.323334 PMI did not appear to announce this publicly and in July 2021, the AG Snus website did not refer to PMI.353634
In 2022, PMI acquired Swedish Match,37 giving the TTC access to the largest snus markets, in Europe and the US.
Altria
In 2019, Altria announced that it was acquiring an 80% share in nicotine pouch on!, from Swiss tobacco company Burger Sohne.3839
Altria & BAT interests in Lexaria Bioscience
Altria and BAT have connections with Canadian company Lexaria Bioscience, relating to its drug and nicotine delivery technology ‘DehydraTECH’.40 For details see Nicotine Pouches.
Company Shares
According to Euromonitor International in 2010 Swedish Match, the only listed snus manufacturer without cigarette interests, held a share of over four fifths of the market in Western Europe, with most of that share in Sweden and Norway.41 TTC (BAT and Imperial) entry into snus saw the company’s market share fall in Sweden and to a lesser extent in Norway.41 By 2019, Swedish Match had under three fifths of the market and a slightly smaller share in Sweden and Norway. Genuine competition between snus and cigarettes on the Scandinavian markets has thus slowly been reduced and is now negligible since PMI’s takeover of Swedish Match. The share of small independent snus manufacturers has always been, and remains, relatively insignificant.41
Despite these TTC snus investments, smokeless tobacco use is not well established in Europe, other than in Norway and Sweden. This partly reflects the fact that the sale of tobacco-derived snus is prohibited in EU member states other than Sweden.
In the US, BAT holds by far the greatest share of the market, over 80%.41 This picture may change now that PMI owns Swedish Match.
Promotion of Snus-type Products for Harm Reduction
From 2012, TTC alternative investments shifted to e-cigarette and HTPs. As with snus, TTCs looked to the these categories to ensure their long-term future, should regulation further constrain the cigarette market or reduce its pricing power, and to reassure investors that TTCs have potential for revenue growth.2 However, from 2019, interest in snus-type products grew again as tobacco companies became more interested in their potential role in their ‘harm reduction’ or ‘reduced risk’ strategies.
FDA Authorises Swedish Match to Advertise Snus as Less Harmful in the US
In October 2019, Swedish Match was the first company to have its application approved by the US Food and Drug Administration (FDA) to advertise eight of its snus products (sold under the ” General” brand) as less harmful.42 Swedish Match had submitted the original application in August 2014.43 This is the first tobacco and nicotine product that the FDA has authorised as less harmful. Specifically, the approved health warning on the snus can state “Using General Snus instead of cigarettes puts you at a lower risk of mouth cancer, heart disease, lung cancer, stroke, emphysema, and chronic bronchitis.”42 The FDA does not consider the products as ‘safe’ and they will continue to carry the generic health warnings required for smokeless tobacco.42 The approval to advertise as reduced risk has a time limit of five years, after which Swedish Match will have to put in an application requesting renewal.
It is likely that the FDA’s decision on snus will affect TTCs’ strategy on NGPs and snus, in the US and perhaps globally. Industry analysist Bonnie Herzog, at investment bank Wells Fargo, was quoted as saying that it was “a huge positive” and “game changer”:44
“We view this as very good news for the broader tobacco/nicotine industry as it demonstrates the FDA’s commitment to a ‘continuum of risk’ strategy and provides viable pathway/process for manufacturers”.44
She also argued that “less harmful” products should be taxed “less onerously” than other tobacco products.44
BAT (Reynolds) Application for Modified Risk Status in the US
As of March 2021, the only other TTC that had an FDA modified risk application pending for its snus products was BAT (Reynolds). BAT submitted 6 Camel snus products for review on 18 December 2017.4546BAT withdrew the application in October 2022.47
TobaccoTactics Resources
- Snus: EU Ban on Snus Sales
- Snus: Marketing to Youth
- Nicotine Pouches
- EU Tobacco Products Directive Revision
- Newer Nicotine and Tobacco Products
- Harm Reduction
TCRG Research
- S. Peeters, A. Gilmore Transnational tobacco company interests in smokeless tobacco in Europe: Analysis of internal industry documents and contemporary industry materials, PLoS Medicine, 2013,10(9):1001506
- S. Peeters, A. Gilmore, Understanding the emergence of the tobacco industry’s use of the term tobacco harm reduction in order to inform public health policy, Tobacco Control, 2015,24(2):182-189
- S. Peeters, A. Gilmore, How online sales and promotion of snus contravenes current European Union legislation, Tobacco Control, 2013; 22:266-273
For a comprehensive list of all TCRG publications, including TCRG research that evaluates the impact of public health policy, go to the Bath TCRG’s list of publications.
