February 3, 2009 - Philip Morris International Inc. (PMI), the largest publicly traded cigarette company, will jointly sell snuff worldwide with Swedish Match AB, broadening the company’s product range as it targets emerging markets for growth.
The companies also said today that they’ll press the European Union to scrap a ban on Swedish-style smokeless tobacco, known as SNUS (pasteurized and put against the upper lip and sucked), which they say is a less unhealthy alternative to cigarettes. The main reason SNUS was banned in European Countries it was feared that it would appeal to children. The few people that use the stuff in the U.S. are young adults and kids that want to be young adults. There is an art to SNUSing - if the bag is not placed in the proper place (and kept there without movement for like 25 minutes) the flow of saliva is increased and the user has the urge to spit.
“Markets like Russia will be the opportunity, where snus is already sold but with limited presence and knowledge,” said David Hayes, an analyst at Nomura in London.
As Swedish Match learned in Russia (Snus product called Click) with no prior Snus tradition - it is a matter of marketing an entire new behavior pattern and teaching consumers. You would think, that if a tobacco users have to change their behavior, they might as well give up tobacco products and live longer.
“It’s a very difficult thing to persuade people to put tobacco in their mouths and suck,” said Jonathan Fell, an analyst at Deutsche Bank AG, who has a “hold” rating on Swedish Match. “It will be a long haul for everybody,” and probably won’t have a meaningful effect on profit for five to 10 years, he said.
Growth of snus use in Norway (a non-European Country.. According to Dr. Karl E. Lund, research director at the Norwegian Institute for Alcohol and Drug Research in Norway over the past decade, daily use of snus has tripled among teens and young adults. Swedish Match, makes what Dr. Lund calls "starter kits." "This is snus sold in glamorous metal boxes…where the snus is seasoned with different kinds of fruit flavors," he explains. "[They are] easy to use for snus novices." (NCI Cancer Bulletin, Feb 20, 2007 vol 4 number 8)
PMI already acquired, back in October 2006, Rocker Production AB (Rocker),a privately owned Swedish SNUS manufacturer..
Reference: Philip Morris, Swedish Match to Sell Snuff Globally (Update4) by Thomas Mulier in Geneva at email@example.com, 2/3/2009.
(PURPLE - comments TobaccoWatch.org..)
Is PMI being sold of a "bill of goods" - SNUS has failed to take-off elsewhere in the way it has taken off in Sweden (Simon Chapman, Queensland Independent, 10/2007).