On June 17, 2024, Philip Morris International (PMI) announced the suspension of sales on its ZYN.com website following a court subpoena issued to its subsidiary, Swedish Match North America. This action comes in response to an investigation by the Attorney General of the District of Columbia regarding the sale of banned flavored nicotine pouch products.
Background and Context
The Flavor Ban in Washington, D.C.
In October 2022, Washington, D.C. implemented a ban on the sale of all flavored tobacco products, including flavored synthetic nicotine products.
Subpoena and Investigation
The subpoena issued to Swedish Match North America by the Attorney General of the District of Columbia focuses on the sale of flavored nicotine pouch products in the region. Preliminary investigations revealed that such products were sold in Washington, D.C., primarily through online sales platforms and independent retailers.
Philip Morris Acquisition
In November 2022, Philip Morris acquired Swedish Match North America, including its popular ZYN nicotine pouch brand. Since the acquisition, ZYN has seen significant growth, with shipment volumes increasing by nearly 80% in the first quarter of this year compared to the previous year.
Impact of the Suspension
Sales Suspension on ZYN.com
As a result of the ongoing investigation, Philip Morris has temporarily suspended all sales on ZYN.com. This decision allows Swedish Match North America to review its sales and supply chain arrangements in Washington, D.C., and other areas affected by the flavor ban.
Market Implications
Limited Impact on Overall Sales:
According to Philip Morris, sales from ZYN.com accounted for only a small portion of the total ZYN sales nationwide. Thus, the suspension is expected to have a limited impact on overall sales figures.
Stock Shortages and Demand:
Previously, ZYN experienced stock shortages due to high demand. Despite the suspension, Philip Morris expects to resume shipments and sales on ZYN.com within the next few weeks.
FAQs
Why were sales on ZYN.com suspended?
Sales on ZYN.com were suspended following a court subpoena related to the sale of banned flavored nicotine pouch products in Washington, D.C.
What is the flavor ban in Washington, D.C.?
In October 2022, Washington, D.C. banned the sale of all flavored tobacco products, including flavored synthetic nicotine products, to reduce their appeal to minors and curb usage.
How has the acquisition of Swedish Match North America impacted ZYN?
Since Philip Morris acquired Swedish Match North America in November 2022, ZYN has seen significant growth, with shipment volumes increasing by nearly 80% in the first quarter of this year compared to the previous year.
What steps is Philip Morris taking in response to the subpoena?
Philip Morris is reviewing its sales and supply chain arrangements in regions affected by the flavor ban and cooperating fully with the Attorney General’s investigation.
When will sales on ZYN.com resume?
Philip Morris expects to resume shipments and sales on ZYN.com within the next few weeks, following a thorough review of compliance with local regulations.
How significant are online sales for ZYN?
Sales from ZYN.com account for only a small portion of the total ZYN sales nationwide, so the suspension is expected to have a limited impact on overall sales figures.
