(Reuters) – Tobacco giant Philip Morris International said on Monday it would suspend online sales on ZYN.com of Swedish Match North America nationwide as nicotine pouch maker Zyn responds to a subpoena from the District of Columbia (DC).
Philip Morris bought Swedish Match in 2022 in a $16 billion deal as the company sought to reduce its dependence on cigarettes amid tighter regulations and a consumer shift to alternatives to tobacco and traditional cigarettes.
The company said Swedish Match North America had received a subpoena from the DC Attorney General requesting information regarding compliance with DC’s 2022 ban on the sale of all flavored tobacco.
In October 2022, DC banned the sale of all flavored tobacco, including flavored synthetic nicotine products.
Philip Morris said it intends to comply with DC’s request and that in the event of an adverse outcome in this matter, material liability is reasonably possible.
The company said preliminary investigations indicate that flavored nicotine pouches have been sold in DC, primarily related to certain online sales platforms and some independent retailers.
“Swedish Match is conducting a full review of its sales and supply chain arrangements in DC and other U.S. locations where flavor bans may apply and is temporarily suspending all sales on ZYN.com until that review is complete,” a Philip Morris spokesperson told Reuters.
Philip Morris has benefited from strong demand for its Zyn nicotine pouches in the US, which the company says do not contain tobacco.
In first-quarter results reported in April, shipments of Zyn nicotine pouches grew nearly 80% compared to a year ago. However, sales on ZYN.com represent a “very small percentage of Zyn volumes nationwide,” the company added Monday.
(Reporting by Juveria Tabassum; Editing by Alan Barona)
