(Reuters) – Tobacco large Philip Morris Worldwide mentioned on Monday that it will droop on-line gross sales on Swedish Match North America’s ZYN.com nationwide because the Zyn nicotine pouch maker responds to a subpoena from the District of Columbia (D.C.).
Philip Morris purchased Swedish Match in a $16 billion deal in 2022 as the corporate regarded to cut back its reliance on cigarettes amid stricter rules, and a client shift in direction of alternate options to tobacco and conventional cigarettes.
The corporate mentioned that Swedish Match North America had obtained a subpoena from D.C.’s Legal professional Basic requesting details about its compliance with D.C.’s 2022 ban on the sale of all flavored tobacco.
In October 2022, D.C. banned the sale of all flavored tobacco, together with flavored artificial nicotine merchandise.
Philip Morris mentioned that it intends to adjust to D.C.’s request and that within the occasion of an unfavorable final result associated to this matter, a fabric legal responsibility in all fairness potential.
The corporate mentioned its preliminary investigation signifies that there have been gross sales of flavored nicotine pouch merchandise in D.C., predominantly associated to sure on-line gross sales platforms and a few unbiased retailers.
“Swedish Match is conducting a full evaluation of its gross sales and provide chain preparations in D.C. and different U.S. localities the place taste bans could apply and is briefly suspending all gross sales on ZYN.com till that evaluation is full,” a Philip Morris spokesperson instructed Reuters.
Philip Morris has benefited from sturdy demand for its Zyn nicotine pouches within the U.S., which the corporate says don’t include tobacco.
In its first quarter outcomes, reported in April, shipments of Zyn nicotine pouches grew almost 80% in contrast with a yr in the past. Nevertheless, gross sales on ZYN.com signify a “very small share of nationwide Zyn volumes,” the corporate added on Monday.
(Reporting by Juveria Tabassum; Modifying by Alan Barona)
