On 16 July 2015 it was announced that the joint venture had been dissolved.
According to Swedish Match, “…There is a small but growing demand for snus in current joint venture markets. The development has, however, taken longer than the parties had initially anticipated. As a consequence the parties have mutually agreed to dissolve the joint venture.”
Based in Stockholm, this joint venture company was incorporated in December 2008 (No. SE5567717128). Its Managing Director was Fredrik Laurell, previously Vice President Special Projects at Swedish Match.
- André Calantzopoulos (from 11 Feb 2009)
- Ashok Rammohan (from 3 September 2010)
- Even Hurwitz (from 11 February 2009)
- Lars Arne Martin Dahlgren (from 30 January 2009)
- Lars Olof Lofman (from 30 January 2009)
- Martin Kallstrom (from 3 September 2010)
Snus Test Markets: Canada, Russia, Israel, and Malaysia
Snus in Russia
PMI is the largest cigarette manufacturer in Russia, leading in both the premium and super premium price categories. Swedish Match trialled snus in Russia before (from 2002 to 2008) in Moscow and St Petersburg, however the company never shared the results publicly. Lars Dahlgren, CEO of Swedish Match, suggested that marketing freedoms were a consideration when selecting Russia as a potential future snus market:
- “Yes, we think that Russia is a very interesting country when it comes to snus. We have had some limited presence there before, when Swedish Match did it alone, and we did see definitely some consumption, so we have some experience that it can appeal to the Russian consumer. And now together with PMI, with their strength in the market, and providing the offering under a very strong premium brand, cigarette brand for the Russian market, I think it's going to be a very interesting test market to follow. And it's also the case that in the Russian market, marketing restrictions are not as strict as they have been for us in the Taiwanese market and the Canadian market.”
In June 2012, Proximity Russia, an advertising firm in Russia posted a page online about a proposed Parliament snus marketing campaign which included Youth Engagement Materials, fuelling concerns that snus might be marketed to young non-smokers.
- See Snus: Marketing to Youth for full details.
Potential Markets in South and Central America
A snus blogger reported in March 2012 that Swedish Match's Online Sales Manager had been promoted to become the Area Manager of the Latin and Central American Region of SMPM International. This could have indicated hat SMPM was considering a Central and South American snus test market, although market research company Euromonitor suggested that "in the absence of a defined message, strategy and product portfolio, the company would be better advised to save on the airfares".
"More Stillborn Than Thriving"
Prior to SMPM’s dissolution, there were indicators that the joint venture was not successful. Both PMI and Swedish Match were secretive about the progress of the joint venture, raising doubts with investors about how well the joint venture was performing, in particular in light of the adoption of the EU Tobacco Products Directive, which maintains the sales ban on snus in all EU countries except for Sweden, dampening any prospects of potential EU growth.
As early as October 2012, Euromonitor questioned the viability of the joint venture in a report titled The Curious Case of SMPM International - More Stillborn Than Thriving?, criticising the company for not having a defined message, strategy and product portfolio, noting that “there is a distinct lack of information emanating from either Swedish Match or Philip Morris on progress to date”.
In March 2015 Euromonitor echoed earlier concerns, proclaiming that the joint venture’s presence in the Swedish Match’s annual report was reduced to a footnote and that investments in the joint venture were diminishing:
- “…Perhaps significantly, the only mention of it [SMPM] in the Swedish Match Annual report was in a footnote concerning ‘investments in associated companies and joint ventures’ which reported ‘additional investments in SMPM International of 35MSEK in 2014 with 57 MSEK in 2013.”
Related TobaccoTactics Resources
- Understanding the emergence of the tobacco industry's use of the term tobacco harm reduction in order to inform public health policy, S. Peeters, A. Gilmore, 2015, Tobacco Control, 24(2):182-189
- Transnational tobacco company interests in smokeless tobacco in Europe: Analysis of internal industry documents and contemporary industry materials, S. Peeters, A. Gilmore, 2013, PLoS Medicine, 10(9):1001506
- The revision of the 2014 European tobacco products directive: an analysis of the tobacco industry's attempts to ‘break the health silo’, S. Peeters, H. Costa, D Stuckler, M. McKee, A. Gilmore, 2016, Tobacco Control, 25(1):108-17
- Swedish Match, Swedish Match and Philip Morris International announce global joint venture to commercialize smokefree tobacco products, http://www.swedishmatch.com, Press Release 3 February 2009, accessed September 2011
- D. Hedley, A Tale of Two Joint Ventures- Goodbye Snus, Hello E-Vapour? Euromonitor International, Opinion 27 July 2015, accessed August 2015
- Swedish Match, Swedish Match and Philip Morris International to dissolve smokeless joint venture, http://www.swedishmatch.com, Press Release 16 July 2015, accessed August 2015
- Amadeus Database, SMPM International AB. Accessed at the British Library Business & IP Centre in London on 26 November 2010
- A. Ringstrom, UPDATE 2-Swedish Match sees price war eventually easing, 14 November 2012, Reuters Edition U.S, accessed November 2012
- Thomson Reuters, Q3 2011 Swedish Match AB Earnings Conference Call, http://www.swedishmatch.com, 26 October 2011, accessed February 2012
- Swedish Match, Swedish Match 2012 Annual Report, March 2013, http://www.swedishmatch.com, accessed March 2013
- L. Waters, Congratulations to Markus Ersmark, http://www.snuscentral.org, blogpost 8 March 2012, accessed April 2012
- S. MacGuill, The Curious Case of SMPM International- More Stillborn Than Thriving. Euromonitor International 12 October 2012, accessed October 2012
- D. Hedley, Swedish Match Full Year Results- Bright Vision or Smokeless Pipe Dream? Euromonitor, Opinion 11 March 2015, accessed March 2015