(Reuters) – Tobacco giant Philip Morris International said on Monday it would suspend online sales on Swedish Match North America’s ZYN.com nationwide, as nicotine pouch maker Zyn responded to a subpoena from the District of Columbia (DC).
Philip Morris bought Swedish Match in a $16 billion deal in 2022, as the company sought to reduce its reliance on cigarettes amid tougher regulations and changing consumers towards alternatives to tobacco and traditional cigarettes.
The company said Swedish Match North America received a subpoena from the D.C. Attorney General seeking information on its compliance with D.C.’s 2022 ban on the sale of all flavored tobacco.
In October 2022, DC banned the sale of all flavored tobacco, including products flavored with synthetic nicotine.
Philip Morris stated that it intended to comply with DC’s request and that in the event of an adverse outcome related to this matter, significant liability would be reasonably possible.
The company said its preliminary investigation indicates that there have been sales of flavored nicotine pouch products in Washington, primarily linked to certain online sales platforms and independent retailers.
“Swedish Match is conducting a comprehensive review of its sales and supply chain agreements in Washington DC and other US locations where flavor bans may apply and is temporarily suspending all sales on ZYN.com until “until this assessment is complete,” a Philip Morris spokesperson told Reuters.
Philip Morris has benefited from strong demand for its Zyn nicotine pouches in the United States, which the company says do not contain tobacco.
In its first-quarter results, released in April, shipments of Zyn nicotine pouches were up nearly 80% from last year. However, sales on ZYN.com represent “a very small percentage of Zyn’s domestic volumes,” the company added Monday.
(Reporting by Juveria Tabassum; editing by Alan Barona)
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