Supplier responsibility

Swedish Match seeks to treat its suppliers and business contacts impartially and strives for stable long term relations with suppliers with whom the Company can develop goods and services through collaboration.

The Company strives to work with suppliers who have a healthy long term financial situation and chooses suppliers who also support Swedish Match’s long term requirements regarding quality, service, ethics, and environmental approach.

Swedish Match has in recent years implemented systems to follow up on adherence to its Supplier Code of Conduct, while also working to develop processes and procedures that may help in providing for improved growing conditions, most importantly in the area of tobacco growing, and in the wider perspective, livelihoods in local communities in areas related to tobacco growing.

Supplier commitment

The Supplier Code of Conduct, launched in 2013, reflects Swedish Match’s own Code of Conduct and specifies what the Company expects and requires from its suppliers. The Company has systems in place to follow up on the adherence of the Supplier Code of Conduct and suppliers shall when required supply Swedish Match, or a party appointed by Swedish Match, with relevant information concerning the requirements set in the document.

For more information, see Swedish Match’s Supplier Code of Conduct.

Supplier responsibility process

Tobacco leaf suppliers

Swedish Match’s largest suppliers are in the areas of purchase and supply of tobacco leaf and processed tobacco. All tobacco leaf suppliers are audited by third party companies. The Company buys well below one percent of the world’s total tobacco supply and does not grow tobacco or buy tobacco directly from farmers. For its production of smokeless products and cigars, Swedish Match buys tobacco from a small number of large global independent leaf tobacco suppliers, who are all major international organizations with their own regulatory frameworks and controls of ethical, social, and environmental issues. These suppliers source tobacco from farmers in countries such as Brazil, the Dominican Republic, Spain, and the US, and process the tobacco according to Swedish Match’s requirements.

The Company’s tobacco purchasers visit suppliers and tobacco markets on a yearly basis to proactively discuss social issues, good agricultural practices, quality, and the environment. Swedish Match also partners with suppliers in its efforts toward the elimination of child labor in the supply chain.

In 2015, Swedish Match continued to engage AB Sustain, an independent and experienced third party auditor, in order to enhance the supplier responsibility process within the Company’s tobacco leaf supply chain.

Other suppliers

Swedish Match sources forestry and paper products for its match production from a small number of suppliers, increasingly from Forest Stewardship CouncilTM (FSCTM) certified sources (license code: FSC-C037294).

Certain suppliers of tobacco and non-tobacco materials operate and/or source from higher risk geographies. As Swedish Match deems these suppliers to have a higher risk of non-compliance with social, environmental, and ethical requirements, the Company further screens and follows up with these suppliers.

The supplier base for indirect materials within the Company’s operating units is larger and more local.