No News is Good News

Swedish Match AB is in PR Emergency Mode today, Monday, October 26th.  Why?

An American researcher from Harvard, Greg Connolly, read a snus ingredient label in 2008, and found a smoking gun called “E500” which regulates acidity in food products, and has been in traditional use in snus for many decades.  It is all snus products produced in Sweden.

The Swedish want-to-be equivalent of “60 Minutes,” called “Kalla Fakta” on Channel 4, after having been given full access by Swedish Match to its R&D and production processes for months, aired a piece Sunday night focusing on how the company manipulates nicotine levels in its products using E500 as a tool to increase availability of “free nicotine” in its snus products.  This strengthens an individuals addiction to the product.  Oh, and Swedish Match has also launched higher nicotine products (sterk/extra sterk, etc) to bring its consumers’ addiction up a notch, and prevent them from quitting.

Skruf, JTI, BAT, Taboca, Gotlands and V2 must be quite happy their use of E500 was not revealed.  That would have implied that SM cannot possibly be manipulating free nicotine levels as a way to solidify its 90% market share.  Sorry.  E500 in all these products levels the playing field.

What about “strong” products?  Skruf has done it successfully for years with Skruf Stark.  Gallaher attempted to launch “Strong Cut” in 2005, but it failed to drag consumers up to 1st class on the addiction train, and it was de-listed in months.  Consumer research shows many consumers would prefer a stronger dose of snus because, lo and behold, snus’s nicotine delivery is consumer-dependent.

NICOTINE LEVEL MANIPULATION

Snus pouches deliver about 10% of the nicotine naturally available in the enclosed tobacco.  Consumers naturally manipulate the pouch with their tongues and/or fingers, and can receive fresh nicotine from the same pouch until the flavor wears off, or later.  Many consumers choose to double-dose standard or mini-pouches, or use loose products.  The size of a loose dose is entirely up to the consumer.  He/she controls the dose.

In fact, the allegation that a snus producer would increase the addiction potential of its products plays more to the assumption that long-term addiction is a higher priority than sales.  If Swedish Match reduced the ability of its products to deliver free nicotine, like “light cigarettes,” it would probably notice that consumers are buying its products more often, and double/triple dosing to reach their desired level of nicotine.  Wouldn’t that be more desirable?

BUT THE SWEDISH SNUS MARKET IS ‘IN DECLINE’

With two straight years of huge increases in weight-based excise taxes (100% in 2006, 50% in 2007), the first increases in 10 years, snus consumption among men dropped 3%.  This was primarily traditional male users of loose products which began pricing themselves out of the market due to the can’s 50g gram-weight.  Additionally, the market as a whole spasmed during this two-year period, creating a larger Duty Free market on the ubiquitous ferries while it simultaneously suffered a slow draw-down of pre-excise-hike overloaded stocks in traditional retail.  In one word, this is called an “adjustment.”

WHERE’S THE NEWS?

Is snus addictive?  Yes.  It’s written on the can.  Where’s the E500?  Also written on the can.  Why is Greg Connolly bothering?  In my opinion, he is looking for the ‘ammonia in Marlboro’ revelation that was revealed to be one of the ways that product was made more addictive in the 1970s.  He hasn’t found it.  The Health Authority has promised to look into the issue, but since the products are produced under its guidelines already, I can’t see anything coming of it.

This is a story that will undoubtedly cause some ripples in Scandinavia.  US impact will be zero as snus is still generally unknown in what is still a one-billion can smokeless market.  Swedish Match will no doubt deftly handle the potential fallout, even in Nervous-Nellie-Norway, and we can all move on.

ANDREW ROMEO
That’s My Perspective; on SnusCENTRAL.org