Saturday, 02 May 2009 16:11

Opinion: The EU Snus Ban

Written by Andrew Romeo
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The EU snus ban is an "Animal Farm" type of idiocy which languishes in the "WTF" category permanently.Anonymous EU Tobacco Guy Snus is nearly harmless. 16% of Swedes use it, and they all live to be 100 years old. The endless debates among Brussels, Karolinska, and Swedish Match are tiresome, and BAT, JTI, and PMI now all have snus through recent acquisitions. What's the 'political' reason? People used to say PMI, but they're now in it. Big Pharma? Possibly.

How about lack of interest?

I used to work for Big Tobacco in Sweden, among other places. Snus had its 15 minutes internationally a few years ago, but frankly, European tobacco consumers by and large have no idea what it is, and if it showed up in shops, would either not see it (due to local display/ad bans) or ignore it.

It is a well known pre-conception that Swedish Match has the most to lose (old, uninteresting brands in dull cans). They are now wisely teamed up with PMI in this territory.

Snus brands such as Lucky Strike, Pall Mall and LD are out there to catch smokers of these popular brands who may want to switch, but the cost and logistics of advertising in such a prohibitive environment almost precludes even trying.

Additionally, the rise of snus in Scandinavia has been due mostly to the price differential relative to cigarettes since the mid-90s. In 2005, a pack of Marlboro was 36 SEK, and a can of General was 23 SEK at the corner shop. LD and Granit cost 12-15 SEK. With two years of massive excise hikes, Swedish snus has stopped growing. Low-priced local cigarettes (Level, Corner) are now priced around the same level as snus.

Would the EU member states allow that kind of price differential to get people off of smokes and into snus? No.Would they allow Big Tobacco to advertise snus? Nope. Will EU member states agree on a warning standard across the continent? LOL!

What's the key to success?Inserts and 'onserts' on cigarette packs, plus heavy use of the Internet. Free product to the trade for years to keep the consumer price down. Cigarettes still have pricing power. Use some of that margin to give snus away. Flavors which appeal to cigarette smokers: Heavy menthols and sweeter fruits and chocolate/mocha, which don't stink (a major issue outside of Sweden and Norway). And, as usual, well-placed press coverage.

The issue is far more complex than the ban in and of itself. And the inertia of the issue at this point in time is due more to lack of a market than some nefarious political scheme. It's akin to lobbying for decaf espresso in Italy.

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