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Improve public health

Our goal is to eliminate cigarette use and tobacco related morbidity and mortality by offering smokers attractive and safer sources of nicotine for recreational use (such as Swedish snus and other nicotine containing products like ZYN).

 

On this page:

  • Our rationale for inclusion
  • Our commitment
    • Our goal
  • Our approach
    • Product strategy
    • Product quality and safety
    • Consumer accessibility
    • Openness and transparency
    • Regulation and protecting vulnerable consumer groups
  • Our progress
    • Highlights 2021
    • Progress update
    • Going forward

Our rationale for inclusion

Cigarette smoking is the dominant method of using nicotine. It causes death and diseases among users who inhale toxic substances created in the combustion. Although nicotine has the potential for addiction, the individual and the societal harm is caused by the inhalation of toxic smoke.

Most countries around the world are looking to reduce the societal harm caused by cigarette smoking through implementation of various kinds of regulation. Experience has, however, showed that relying on increased regulation alone is a slow and inefficient method for achieving this goal. If smokers who do not want to or find it hard to stop using nicotine are offered dramatically safer alternative nicotine products, the adverse health effects can be addressed both faster and more efficiently.

Smokefree tobacco products manufactured according to Swedish Match’s quality standards have played an important role in reducing smoking rates in Sweden and Norway for many years. Swedish Match is convinced that this journey of tobacco harm reduction will continue. We also see opportunities to replicate this experience around the globe. Our success with ZYN in the US shows that many smokers are willing to try nicotine pouches if they become aware of the products and understand the large difference in associated health risks compared to cigarettes.

Our commitment

Swedish Match’s vision is of A world without cigarettes. The Company is committed to displacing cigarettes by continuing to develop and commercialize alternative and dramatically safer sources of nicotine – which will improve public health. Youth and certain vulnerable consumer groups should not use nicotine products. Swedish Match will continue to work for appropriate regulation which promotes consumer shifting from cigarettes to less harmful nicotine and tobacco products while also protecting vulnerable consumer groups.

The scope of this focus area is the entire value chain.

Our goal

Our goal is to eliminate cigarette use and tobacco related morbidity and mortality by offering smokers attractive and safer sources of nicotine for recreational use (such as Swedish snus and other nicotine containing products like ZYN).

  • Development and commercialization of nicotine harm reduction products that are attractive to cigarette users and dramatically safer sources of nicotine compared to cigarettes.
  • Increased consumer awareness and consumer reach of snus and nicotine pouches.
  • Factual and correct media and authority reporting on the difference in relative risks between cigarettes and smokefree tobacco and nicotine products, as well as increased consumer awareness.
  • Regulation that promotes consumer shifting from cigarettes to less harmful nicotine and tobacco products while also protecting vulnerable consumer groups.

Our approach

Product strategy

Swedish Match provides a wide range of attractive alternatives to cigarettes that are both enjoyable and dramatically safer than smoking. Our smokefree portfolio consists of snus, moist snuff, chewing tobacco1) as well as innovative products such as nicotine pouches. The vast majority of our R&D efforts and capital expenditures are dedicated to our smokefree business and almost all acquisitions made in recent years have been done to strengthen our smokefree portfolio.

Product appeal is highly important in order to successfully encourage cigarette consumers to find alternative products with favorable risk profiles. At the core of Swedish Match’s research and development efforts are quality, reduction of potentially harmful constituents and the needs of the adult tobacco consumer. We have been acknowledged around the world for the work we have done in reducing potentially harmful components in our snus products. With nicotine pouches we have taken a step further and have managed to come below the levels that can be detected for almost all of these components – a longstanding aim of Swedish Match. However, it does not matter how much we reduce the risks related to our products if the cigarette consumers do not want to use them. Therefore, behavioral, sensorial and other needs expressed by tobacco users are carefully assessed and incorporated in our product development processes. We know that flavor is an important part of product appeal to cigarette consumers and finding the right flavors for them is important.

1) All chewing tobacco products sold by Swedish Match are sold in Europe and in the US and are in general low in tobacco-specific nitrosamines and other relevant harmful and potential harmful constituents, compared with the chewing tobacco varieties that are sold in other parts of the world.

Product quality and safety

More than 20 years ago, Swedish Match decided to make detailed information about its GOTHIATEK® quality standard available to our consumers and other relevant stakeholders. The objective of the GOTHIATEK® quality standard is to eliminate or reduce harmful or potentially harmful constituents, naturally found in tobacco (and other common crops), to a level that meets comparable food standards. The standard sets maximum levels in finished products for 16 unwanted constituents of which three have also become regulated under the Swedish food legislation. For a list of constituents and current levels, please see page GOTHIATEK® standard.

Nicotine pouch products represent a further step in Swedish Match’s work to reduce undesirable constituents in our products. No traces of the three unwanted constituents regulated by the Swedish food legislation for snus can be detected in our nicotine pouch products.

Swedish Match conducts only limited scientific studies on its own but monitors and compiles scientific advancements continuously in a systematic manner. A summary of relevant scientific evidence on snus is available on our Company website and this will be complemented by science on nicotine pouches as it becomes available.

Consumer accessibility

To encourage consumers to find reduced risk alternatives, accessibility is essential. Swedish Match is committed to investing in capacity expansion and expanded distribution for our smokefree portfolio, both in our key markets as well as markets where we currently have no or low presence.

Openness and transparency

Consumers are seeking and have a right to factual information about product options available to them. This implies that manufacturers, including Swedish Match, must be open and transparent about what we know about our products, including scientific findings regarding health impacts. We should communicate this to consumers where we are legally allowed to do so. We should also encourage authorities to give factual and unbiased information about the relative harm of different tobacco products and encourage legislators and regulators to regulate tobacco products differently based on their risk profile.

Regulation and protecting vulnerable consumer groups

During the year, we have continued to actively encourage regulators in a number of European countries to introduce legislation on nicotine pouches that would limit marketing, cap nicotine levels and perhaps most importantly make the sale of the products to non-adults illegal. In the US, our regulatory focus has been on making sure that our harm reduction products can be sold to adult tobacco users in flavors that are appealing to them. In our regulatory engagement we support:

  • Regulation that promotes consumer shifting from cigarettes to less harmful nicotine and tobacco products.
  • Regulation of nicotine and tobacco products to ensure that minors don’t have access to the products, that there are coherent warning labels on the products and that there are appropriate restrictions on marketing.
  • Product regulation for the nicotine pouch and smokefree tobacco categories to ensure that there are scientifically based thresholds for harmful and potentially harmful constituents.
  • Excise taxation according to relative risk between different tobacco and nicotine products.

Our challenges

There are widespread misconceptions about the risk profile of smokefree products compared to cigarettes among both regulators and consumers.
There is a lack of nicotine pouch specific regulation in many of the countries where we operate or intend to operate.

Our progress

Highlights 2021

  • ZYN available in more than 120,000 stores in the US.
  • US shipment volumes for ZYN increased by more than 50 percent.
  • Swedish Match nicotine pouches available in more than 20 countries.
  • Regulation specifically recognizing nicotine pouches adopted in Switzerland and the Czech Republic and such legislation implemented in Denmark.
  • Initiatives taken to implement nicotine pouch specific legislation in a number of EU countries, including Sweden.

Progress update

During 2021 we have further increased the relative contribution from our smokefree portfolio to the total Group. Currently our smokefree business accounts for 72.1 percent of total Swedish Match sales of tobacco and nicotine products compared to 70.1 percent in 2020.

We have actively worked towards increasing the consumer reach of our nicotine pouches in both existing and new markets. The total numbers of retailers where Swedish Match nicotine pouch products are available outside Scandinavia increased from around 115,000 stores in 2020 to almost 130,000 stores in 2021. During the year, Swedish Match further expanded the availability of ZYN in the US and by the end of 2021, ZYN was available in more than 120,000 stores. During the year, Swedish Match has also expanded the availability of its nicotine pouch products on a limited scale to a number of countries outside of Scandinavia and US, and by the end of the year, we were present in more than 20 countries.

In 2021 we have continued to invest heavily behind our smokefree products to fuel future growth. Similar to previous years, we have committed more than 90 percent of our capital expenditure to our smokefree portfolio. During the year, we have once again scaled up the ZYN production capacity in the US. Out of our total R&D expenditure, 91 percent was related to smokefree products.

Driven by the efforts mentioned above, we have continued on the journey towards a world without cigarettes. In the combined Swedish and Norwegian market, shipments of Swedish Match smokefree products in relation to cigarette category volumes increased from 73.6 percent in 2020 to 75.3 percent in 2021.1)2)

The conversion of cigarette smokers to less hazardous alternatives would be even faster if more smokers are aware of the dramatic difference in the relative risk between smokefree products and cigarettes. Educating consumers on such difference continues to be an important task. This difference is probably best understood in Sweden and Norway, but there is widespread misunderstanding even in these markets. In the general population in Sweden, 30 percent believe that snus is at least as dangerous as cigarettes or answer that they do not know. In Norway the equivalent proportion is 34 percent. Only 23 percent of the Swedish population believe that snus is much less dangerous than cigarettes and in Norway this number is only 19 percent. Thus continuous efforts to further increase consumer awareness will remain a focus going forward. We will continue to engage with the scientific community to verify the public health benefits of our products and will continue to be transparent to our stakeholders.

In March 2020, Swedish Match submitted PMTA applications for all its ZYN products presently on the US market and these applications are under scientific review by the FDA. The applications show that almost all harmful and potentially harmful components commonly associated with tobacco products have been reduced below detection levels. Further, the consumer studies presented in the applications show that there is little interest in the ZYN products among consumers who are not tobacco consumers and that there is a large potential to attract existing tobacco users to the products. During 2021, Swedish Match has continued to work on new PMTA applications for products not presently on the US market.

The most important goal of Swedish Match regulatory efforts in Europe is to initiate regulation for nicotine pouches. Specific legislation should be implemented in order to ensure age limits, appropriate marketing restrictions and product standards (including maximum nicotine content per pouch) to ensure consumer protection. During the year regulation specifically recognizing nicotine pouches was adopted in Switzerland and the Czech Republic. Such legislation was adopted in Denmark in 2020 and implemented in 2021.

Swedish Match has had regulatory contact in a number of EU countries and some progress has been made. Already in 2016, Swedish Match contacted the responsible minister in Sweden, alerting the Swedish government that nicotine pouches were not covered by Swedish tobacco legislation and that the products could therefore be legally sold to minors. We have also pointed out that there are no specific marketing restrictions and no product regulations to ensure the safety profile of the products. The Swedish government has now finally announced that regulation will be proposed in 2022. Swedish Match has also contacted regulators in a number of other EU countries alerting them of the regulatory situation for nicotine pouches. In some of these countries, regulators have expressed an active interest in initiating regulation.

Another objective of Swedish Match is that tobacco taxation should be based on relative risk of the different product categories. In 2021 the Norwegian tax was decreased by 25 percent without a corresponding decrease of the cigarette tax. In the budget for 2022 snus taxes were raised by 5.9 percent and cigarette taxes were raised by 6.5 percent.

1) Based on Swedish Match shipment volumes. All volumes are converted to can equivalent.
2) Cigarette volumes in Sweden is based on distribution data and volumes in Norway is based on data from the tax authority.

 

Consumer reach1) (thousands of stores)202120202019
Number of retailers where Swedish Match nicotine pouches are available outside Scandinavia2)12911679

1) Based on number of retailers for nicotine pouches in the US and Other markets (excluding Germany).

2) The information on retailers is based on distributor data and Swedish Match estimates by the end of each year.

 

Swedish Match's smokefree products1), as a share of its total tobacco/nicotine products, %202120202019
Volumes2)84.08383.5
Net sales72.170.167.7
Capital expenditure including acquisitions91.393.392.1
R&D cost90.595.395.8

1) Smokefree consists of snus, nicotine pouches, moist snuff and chewing tobacco.

2) All volumes are converted to portion equivalent.

 

Sustainability tables in XLS format 

Going forward

Goals
 
Commentary
Development and commercialization of nicotine harm reduction products that are attractive to cigarette users and dramatically safer sources of nicotine compared to cigarettes. Swedish Match will continue to dedicate a vast majority of its R&D resources to development of smokefree tobacco and nicotine products.

Swedish Match will continue to dedicate resources to increased geographical footprint for its smokefree nicotine products.
Increased consumer awareness and consumer reach of snus and nicotine pouches. Swedish Match will continue to dedicate significant resources to marketing of its nicotine pouch products to increase consumer awareness.
Factual and correct media and authority reporting on the difference in relative risks between cigarettes and smokefree tobacco and nicotine products, as well as increased consumer awareness. Swedish Match will continue to be active and transparent in the public debate about our products and their health effects.
Regulation that promotes consumer shifting from cigarettes to less harmful nicotine and tobacco products while also protecting vulnerable consumer groups. Swedish Match will continue to engage with regulators to promote interest in specific nicotine pouch regulation.

Related information

Snus and health

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Corporate headquarters
Swedish Match

Swedish Match AB
SE-118 85 Stockholm

Phone +46 10 13 93 000
Corporate reg no. 556015-0756
contactus@swedishmatch.com

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