In May 2005 our companies in South Africa and Sweden began test-marketing the sachet variety of snus using two of our major cigarette brands.

October 31, 2007 - In May 2005 our companies in South Africa and Sweden began test-marketing the sachet variety of snus using two of our major cigarette brands. We were responding to public health stakeholders who told us they believe snus, properly regulated, can contribute to reducing the net public health impact of tobacco use, and to consumers who told us in dialogue that developing less harmful products is one of the most important things a tobacco business can do. Encouraged by feedback from consumers and some health experts, operations in both Sweden and South Africa have expanded and limited sales in Norway started. We have also opened our own snus product development facility at our R&D laboratories in the UK and have run a limited consumer test in Japan. In September 2007 our Canadian subsidiary began a test market in the city of Edmonton, Alberta, using its leading cigarette brand du Maurier. Sweden - Snus is already more popular than cigarettes in Sweden but we set out to see if our global Lucky Strike brand could extend its appeal to adult smokers. Our Nordic company first offered our product in just 300 outlets in Stockholm but it is now available in major cities across the country. South Africa - Snus is now sold under our Peter Stuyvesant and Lucky Strike brands in some 400 outlets in Johannesburg and Pretoria. Snus is not widely known in South Africa but the brands are bringing it to smokers’ attention. At first the tins had to be labelled with the health warning for cigarettes. Research showed that few consumers saw snus as less harmful than smoking and many even believed it was more harmful. In a positive step, the Department for Health allowed a change of health warning from “Causes Cancer” to “Tobacco is Addictive”. A voluntary warning on the side of the tin says: “This tobacco product can be harmful to your health”.