The subsidiary of SWEDISH MATCH
AB, SVENSKA TOBAKS AB, and the Danish corporation SKANDINAVISK
TOBAKSKOMPAGNI A/S have reached an Agreement-in-Principle on
changing the terms of sales and distribution of the cigarette
brand Prince on the Swedish market. The prior agreement, under
which Svenska Tobaks AB has all rights under license, including
marketing and sales in Sweden, is not accepted by the EU
Commission as it is regarded as contrary to competition
regulations.
Under the Agreement-in-Principle,
Svenska Tobaks AB will continue to manufacture and distribute
Prince while Skandinavisk Tobakskompagni A/S as of earliest April
1st, 1997, will be handling marketing and sales itself for the
Swedish market. The Agreement-in-Principle requires new
agreements which in detail clarify the rights and obligations of
the parties. It is also a prerequisite that the agreements are
officially accepted by the EU Commission. The new agreements
shall be in force until the end of the year 2001, i.e. as the
earlier agreement.
It has been established by the
Commission, that the questions on conformity with the rules of
competition have been solved in a way acceptable to the
Commission. The official acceptance is therefore not foreseen as
a problem.
The parties will now discuss the
Agreement-in-Principle with the Swedish Competition Authority.
The economical risk that the
Prince licence inferred, was emphasised in the Swedish Match
listing particulars published in connection with the introduction
on the stock exchange. The negative effect on the economical
result will be limited to approximately 40 million SEK -
everything else equal - per year as a result of the agreement now
made.
-I am very pleased with this
agreement says Göran Lindén, CEO of Swedish Match, in a
comment. It means that the ongoing co-operation with Skandinavisk
Tobakskompagni regarding Prince, assuming the Swedish Competition
Authority shares the view of the Commission, will be secured for
the full term of the earlier contract, even though on modified
terms. It also means that we maintain a good profitability for
producing and distributing Prince on the Swedish market, Göran
Lindén concludes.
For further information, please
contact
Bo Aulin, Senior Vice President,
Secretary and General Counsel
+46 8 658 03 64 (Office), +46 70 558 03 64 (Cellphone), +46 8 590
728 43 (Residence), or
Alf Ehinger, Senior Vice
President, Investor Relations
+46 8 658 01 73 (Office), +46 708 45 49 42 (Cellphone), or
Roland Perlström, Senior Vice
President, Information
+41 22 363 93 11 (Office), +41 89 200 33 51 (Cellphone), +41 22
362 92 93 (Residence)