Swedish Match

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Swedish Match General snus

Contents

Background

Swedish Match is a Swedish tobacco company that manufactures and sells snus (pictured above), cigars, chewing tobacco, and matches. The company used to sell cigarettes too, but decided in 1999 to divest its cigarette business to Austria Tabak.[1] Lennart Sundén, then President and CEO of Swedish Match, said at the time:

Cigarette consumption, the industry’s most dominant source of revenue, is declining or has reached a plateau in most Western countries. For Swedish Match therefore, the divestment of our cigarette operations was a natural step. We were a strong player in local markets, but a very small player compared with our main competitors.[2]

According to the company's 2012 Annual Report, 40% of Swedish Match sales come from snus and snuff, generating 63% of the company's operating profit. The company is currently the only listed European smokeless tobacco manufacturer, and aims to become the "global smokefree leader",[3]focusing on introducing General snus to the US market through an increased marketing investment.[4][5]

Brands

  • Snus (Scandinavia and US): General, Catch, Göteborgs Rapé, Ettan, Grovsnus, Catch, Kronan, Röda Lacket, Probe Whiskey, Lab series 01 & 02, Tre Ankara, Nick & Johnny, Kaliber.
  • Moist snuff (US): Longhorn, Timber Wolf, Red Man
  • Cigars (US): White Owl, Garcia y Vega, Game by Garcia y Vega
  • Chewing tobacco (US): Red Man, Red Man Golden Blend, Red Man Silver Blend, Southern Pride, J.D.’s Blend, Granger Select
  • Matches & other fire related products: Solstickan, Fiat Lux, Swan, Tres Estrellas, Feudor, Redheads
  • Lighters: Cricket

Market Share

Scandinavia (snus)

Since transnational tobacco companies started acquiring Swedish snus manufacturers from 2002 onwards,[6] Swedish Match’s market share in both Norway and Sweden has slowly eroded by over 10% according to market research company Euromonitor International.[7][8] In Sweden, Swedish Match's market share fell from 98.1% in 2002 to 83.8% in 2009.[7] Likewise, in Norway their market share declined from 91.1% to 80.7%, with the strongest decline in 2008 when both Imperial Tobacco and BAT almost doubled their Norwegian market share.[8]

United States (moist snuff and snus)

Swedish Match is the third biggest producer of moist snuff in the US with 10% of the market share in January 2012, compared with market leader Altria (56.6%) and RJ Reynolds which holds 32.2%.[9]

Sales of Swedish snus in the US is relatively insignificant, but Swedish Match is reportedly increasing its marketing efforts to grow these sales, with General snus available in 3,500 stores across the US in 2011.[9]

Partnerships and Affiliations

Lorillard

In 2006 Swedish Match entered into a joint venture with Lorillard (the third largest cigarette manufacturer in the US at the time) to develop Swedish-style snus for the US market,[10] but this joint venture was terminated at the end of 2009 due to apparent unsatisfactory results.[11][12]

Philip Morris International (PMI)

In February 2009 Swedish Match announced that it had entered into a joint venture with PMI to "commercialize Swedish snus and other tobacco products worldwide, outside of Scandinavia and the United States".[13] Swedish Match owns 50% and PMI owns 50%. The joint venture company is known as SMPM International, and recently started test marketing snus in Israel and Malaysia[14], following previous test markets in Taiwan, Canada and Russia.[9]

European Smokeless Tobacco Council (ESTOC)

In 1989, Swedish Match (then known as Svenska Tobaks), co-founded ESTOC with US Smokeless Tobacco Company (UST).[15] ESTOC's current Chairman, Patrik Hildingsson, works for Swedish Match.[16]

Funding Scientists

Swedish Match North America is a donor to the University of Louisville's Kentucky Research Challenge Trust Fund,[17] which funds the University's Endowed Chair in Tobacco Harm Reduction currently held by Brad Rodu.[18][19]

Lobbying in the EU

Swedish Match has been lobbying to have the EU ban on snus sales removed. For more details, see the TobaccoTactics page Snus: EU Ban on Snus Sales.

The company has an EU Representation Office in Brussels, and in 2011 publicly disclosed that it had spent €100,000- 150,000 on EU lobbying in the 2009 financial year, with the subject of interest being "the upcoming review of the Tobacco Products Directive".[20] In a recent presentation to the US Food and Drug Administration, Lars-Erik Rutqvist, Senior Vice-President Scientific Affairs Swedish Match, noted the "close relationship between industry and government" in Sweden.[21] Indeed the Swedish Government has supported Swedish Match's call for a removal of the EU snus ban for several years,[22][23] viewing it as a violation of free trade principles rather than a public health issue,[24] an argument first presented by Swedish Match over a decade ago.[25]

Another vocal advocate for removing the EU ban on snus sales is Swedish Member of European Parliament (MEP) Christofer Fjellner,[26] who in 2010 had at least two meetings with Swedish Match, [27] including one in September 2010 (see screenshot below), one month prior to Fjellner launching an EU petition encouraging people to complain to the European Commission about the snus ban.

Online monthly diary page of Swedish MEP Christofer Fjellner, showing a listed meeting on 10 September 2010 titled (translated in English) "Speak with snus manufacturer Swedish Match" (screenshot taken 30 March 2012)


Sudden Resignation of EU Health Commissioner Dalli

On 16 October 2012 it was announced that EU Health Commissioner John Dalli had resigned over allegations made by Swedish Match relating to the review of the Tobacco Products Directive.[28] The company had filed a complaint in May 2012, claiming that Swedish Match has been approached by a Maltese businessman who had offered to use his contacts with Dalli to influence a favourable review of the EU ban on snus. The complaint was investigated by OLAF, the EU's Anti-Fraud Office. The Smoke Free Partnership, a partnership between the European Respiratory Society, Cancer Research UK and the European Heart Network, has suggested that Dalli’s resignation may delay the TPD review.[29]

Online Strategy

According to the site policy on Swedish Match's website, the company regards the Internet as "one of the most important communication channels to its stakeholders, in particular the financial market, i.e. financial analysts, financial media, institutional investors and shareholders, but also other media, business partners, customers, potential new employees as well as our existing employees around the world".[30] As such Swedish Match has an active presence online; it promotes the company, its products and brands on its corporate website and two further websites registered to Swedish Match (http://www.svensktsnus.se/en/ and brand-specific website http://www.generalsnus.com/), while Swedish Match employees regularly contribute to online snus user communities and social networking sites including Facebook.

Blogging

Swedish Match has embraced the blogosphere, and actively nurtures its relationship with key bloggers. In May 2011 the company hosted a delegation of US and UK snus bloggers for a promotional tour in Stockholm, visiting Swedish Match headquarters and factories, as well as a Tobacco Museum, all courtesy of Swedish Match.[31] It appears that inviting bloggers to Sweden is an annual activity for Swedish Match. In May 2010 two other US bloggers visited Sweden and the company, courtesy of Swedish Match, as was the case in 2009.[32] The company also uses blogs to actively engage with its customers. Along with Danish snus manufacturer V2 Tobacco, Swedish Match has a section on the US bloggers website SnusCENTRAL.org, titled ‘Ask the Manufacturer’. From August 2009 to April 2010, Markus Ersmark (up to March 2012 Swedish Match Online Sales Manager) and a former colleague directly responded to snus users' questions about Swedish Match snus products and snus use in general (see picture 1 below). Over a period of eight months, the duo responded to 31 consumer questions, started one thread themselves, and in total posted 56 messages.[33] More recently, Lars-Erik Rutqvist, Swedish Match Senior Vice President for Scientific Affairs and occasional SnusCENTRAL.org columnist (see picture 2), has been using this same forum to criticise the EU ban on snus sales, among other things. Rutqvist's blog of 17 March 2011 notes that the EU ban on snus sales was "a strange ban", and that "the logic behind it is indeed obscure".


Picture 1: Swedish Match employees use online snus user forums to directly communicate with customers (screenshot www.snuscentral.org, accessed 24 February 2011)
Picture 2: Swedish Match Vice President Scientific Affairs is a columnist for an online snus user community (screenshot www.snuscentral.org, accessed 3 April 2012)


Social media

In 2010, Seidenberg and colleagues highlighted that Swedish Match was promoting its products on YouTube.[34] Swedish Match employees are also active on Facebook, a social networking site which in 2011 claimed to have 750 million registered users of which nearly 50% are aged less than 25 years old.[35] A recent Social Network Analysis also demonstrated that Swedish Match employees are part of a dense Facebook network of snus manufacturers, snus retailers, and pro-snus bloggers that generate pro-snus content, with Swedish Match employee Markus Ersmark the most connected person in this network.[36]

Key People

Board of Directors

The company's Board of Directors consists of seven members elected by the General Meeting, plus three employee representatives, and their three deputies:[37]

  • Conny Karlsson - Chairman of the Board since 2007. Chairman of the Compensation Committee. Board member since 2006.
  • Andrew Cripps - Deputy Chairman and member of the Audit Committee. Board member since 2006.
  • Karen Guerra - Member of the Compensation Committee. Board member since 2008.
  • Wenche Rolfsen – Board member since 2013.
  • Robert F. Sharpe- Member of the Compensation Committee. Board member since 2011.
  • Meg Tivéus - Chairman of the Audit Committee.
  • Joakim Westh- Member of the Audit Committee. Board member since 2011
  • Kenneth Ek - Board member since 1999 (employee representative).
  • Eva Larsson - Board member since 1999 (employee representative).
  • Håkan Johansson - Deputy member since 2004.
  • Patrik Engelbrektsson - Deputy member since 2012.
  • Eva Norlén-Moritz - Deputy member since 2010.
  • Gert-Inge Rang - Deputy member since 2007.

===Management===[38]

  • Lars Dahlgren - President and CEO since 2008.
  • Richard Flaherty - President of US Division since 2009.
  • Marlene Forsell – Senior Vice President and Chief Financial Officer since 2013.
  • Emmett Harrison - Senior Vice-President, Corporate Communications and Sustainability since 2010.
  • Fredrik Lagercrantz – Senior Vice President Business Control since 2013.
  • Lars Olof Löfman -Senior Vice President Product Supply and Marketing, Scandinavia Division, previously President of the Smokefree Products Division.
  • Fredrik Peyron - Senior Vice President Legal Affairs and General Counsel since 2007.
  • Joakim Tilly – President Scandinavia Division since 2013, previously Chief Financial Officer and Senior Vice President Group Finance and IT between 2008 and 2013.

Notes

  1. Swedish Match, Swedish Match to sell the cigarette business to Austria Tabak for MSEK 4,800, Press Release 31 May 1999, accessed 20 June 2010
  2. Swedish Match, Swedish Match 1999 Annual Report, accessed October 2011
  3. Swedish Match,Company Presentation: Who we are, What we do. 21 July 2010, accessed October 2011
  4. CPS Daily News, Swedish Match Moves Ahead with Snus in U.S., 22 February 2012, accessed 29 March 2012
  5. Thomson Reuters Q3 2011 Swedish Match AB Earnings Conference Call, 26 October 2011, accessed 7 February 2012
  6. Peeters, Gilmore. A report on the tobacco industry rationale and approach to expand sales of smokeless tobacco (snus) in the European Union. A Pricing Policies and Control of Tobacco in Europe (PPACTE) output. Bath: University of Bath. 2011.
  7. 7.0 7.1 Euromonitor International, Euromonitor Tobacco Passport: Sweden snus 2001-2009 by Global Brand Owner, Retail Volume, % breakdown, accessed October 2010
  8. 8.0 8.1 Euromonitor International, Euromonitor Tobacco Passport: Norway snus 2006-2009 by Global Brand Owner, Retail Volume, % breakdown, accessed October 2010
  9. 9.0 9.1 9.2 Swedish Match, Q4 2011 presentation, 22 February 2012, accessed 29 March 2012
  10. Swedish Match, January-September 2006 Interim Statement, accessed 7 February 2012
  11. FD (Fair Disclosure) Wire, Conference Call Transcript with Lorillard Executives at the Morgan Stanley Consumer & Retail Conference 16 November 2010, via LexisNexis, accessed 7 February 2012
  12. Swedish Match, Swedish Match 2010 Annual Report, accessed 7 February 2012
  13. Swedish Match, Swedish Match and Philip Morris International announce global joint venture to commercialize smokefree tobacco products, Press Release 3 February 2009, accessed 5 September 2011
  14. Swedish Match 2012 Annual Report, March 2013, accessed 27 March 2013
  15. US Smokeless Tobacco, Note from John Walter to Per Erik Lindqvist enclosing legal brief on European Smokeless Tobacco Council, 16 February 1989, accessed September 2011
  16. ESTOC, Structure, undated, accessed 20 March 2012
  17. University of Louisville, Bucks for Brains donors], undated, accessed 4 April 2012
  18. University of Louisville, Endowed Chair in Tobacco Harm Reduction Research, undated, accessed 7 March 2012
  19. University of Louisville, Department of Medicine: Brad K Rodu, undated, accessed 7 March 2012
  20. European Union, Transparency Register, 26 May 2011, accessed 4 November 2011
  21. Lars-Erik Rutqvist, FDA-TPSAC Meeting on Dissolvable Products Jan. 18-20, 2012 ”The Swedish Tobacco Harm Reduction Experience”. Available from: http://www.fda.gov/downloads/AdvisoryCommittees/CommitteesMeetingMaterials/TobaccoProductsScientificAdvisoryCommittee/UCM288270.pdf, accessed 30 March 2012
  22. Swedish Match, Swedish Match welcomes an important step to normalize trade in the EU, press release 28 November 2008, accessed on 20 June 2012
  23. Danielsson C., Sweden's response to the public consultation on Directive 2001/37/EC of 5 June 2001 on the approximation of the laws, regulations and administrative provisions of the Member States concerning the manufacture, presentation and sale of tobacco products. Available from: http://ec.europa.eu/health/tobacco/docs/contribution_sweden_en.pdf., accessed 16 January 2012
  24. K Gustafsson, Sweden Urges EU To Lift Ban On Snus Exports, The Wall Street Journal Online, 30 May 2011, accessed 12 Jan 2012
  25. Swedish Match. Arbitrary, Unreasonable and Discriminatory, press release 3 June 2002, accessed 2 Jun 2011
  26. www.expressen.se, Ewa Björling och Christofer Fjellner: Hjälp oss att rädda svensk snuskultur, 5 November 2010, accessed 30 March 2012
  27. Christofer Fjellner, Kalender, accessed 24 February 2011
  28. Europa, Press statement on behalf of the European Commission, 16 October 2012, accessed 17 October 2012
  29. Smoke Free Partnership, Dalli resignation - SFP statement, 16 October 2012, accessed 17 October 2012
  30. Swedish Match, Site Policy: Purpose of the Site, website, accessed 16 March 2011
  31. Mick Hellwig, The most exclusive snus in the world, 2 June 2011, accessed 5 April 2012
  32. Chad Jones, Full report on the trip to Sweden and visit with Swedish Match! 31 May 2010, 31 May 2010, accessed 5 April 2012
  33. Markus Ersmark & Joakim Blom, Ask Swedish Match, messages posted from 8 August 2009 to 8 April 2010, accessed 3 April 2012
  34. Andrew Seidenberg, Vaughan Rees, and Gregory Connolly, Swedish Match marketing on YouTube, Tobacco Control 2010, 19, p512-123
  35. Facebook, Inside Facebook, accessed 1 July 2011
  36. Peeters, Clements, Gilmore, How the Internet undermines EU tobacco control legislation: online snus marketing & promotion. Presentation at the 15th World Conference of Tobacco of Health, Singapore. 21 March 2011
  37. Swedish Match Website,Corporate Governance and Board of Directors, accessed September 2013
  38. Swedish Match Website,Corporate Governance and Management, accessed September 2013
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