Philip Morris Suspends Nationwide Sales on Zyn.com After D.C. Subpoena
Philip Morris International announced on Monday that it will suspend online sales on Swedish Match North America's ZYN.com across the nation. This move comes as the Zyn nicotine pouch maker responds to a subpoena from the District of Columbia (D.C.). Philip Morris bought Swedish Match for $16 billion in 2022, aiming to reduce its dependency on cigarettes amid stricter regulations and a shift in consumer preferences towards tobacco alternatives.
Background of the Subpoena
Swedish Match North America received a subpoena from D.C.'s Attorney General, who is requesting information about the company's compliance with D.C.'s 2022 ban on the sale of all flavored tobacco products. In October 2022, D.C. banned the sale of all flavored tobacco, including those with flavored synthetic nicotine.
Compliance and Investigation
Philip Morris intends to fully comply with D.C.'s request. They also mentioned that if the outcome of the investigation is unfavorable, a material liability may be reasonably expected. Preliminary investigations indicate sales of flavored nicotine pouch products in D.C., mainly through online platforms and some independent retailers.
According to a Philip Morris spokesperson, Swedish Match is conducting a thorough review of its sales and supply chain arrangements in D.C. and other U.S. areas where flavor bans may apply. As part of this assessment, they are temporarily halting all sales on ZYN.com.
Performance of ZYN Nicotine Pouches
Despite the suspension of online sales, Philip Morris has experienced strong demand for its Zyn nicotine pouches in the U.S. The company claims these pouches do not contain tobacco. In April, Philip Morris reported that shipments of Zyn nicotine pouches grew nearly 80% in the first quarter compared to a year ago. However, sales on ZYN.com account for a "very small percentage" of national Zyn volumes, the company clarified on Monday.
By using key phrases and complying with regulatory requests, Philip Morris aims to maintain its reputation and adapt to changing market conditions, echoing a broader shift in the industry towards healthier alternatives and stricter compliance measures.
