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July 15th, 2016:

World’s third-largest tobacco producer quits cigarettes

As cigarettes face increasing regulation and a diminished customer base, under Lars Dahlgren’s leadership Swedish Match is looking ahead to a smoke-free tobacco industry

Based in Stockholm, Swedish Match is a company that makes snuff, chewing tobacco, cigars, matches and lighters. However, it is most famous for making snus – a unique Swedish variety of moist snuff, designed to be placed under the upper lip for long periods of time. The company is the third-largest producer of tobacco products in Europe, according to the 2015 Financial Times Global 500 list. The two other largest tobacco firms on the continent, by the same measurement, are British American Tobacco and Imperial Tobacco. Both of these are UK-based.

While the UK is not exactly known as a hotspot of tobacco use in Europe, historically it played a larger role in the development and growth of the tobacco industry, while Sweden – at least within popular perception – has played a much smaller role. It should be seen as no small feat, then, that this Swedish tobacco company has managed to secure itself so lofty a position. A large part of its success is due to the company’s forward-looking approach when it comes to selling tobacco. The firm itself no longer produces cigarettes, having divested from that particular product 11 years ago. Rather, Swedish Match has steered away from smoke-related tobacco products, focusing instead on the safer snus and chewing tobacco alternatives. This strategy has been followed under the overall direction of one man since 2008: CEO Lars Dahlgren.

Dahlgren and Swedish Match have recognised that smoking tobacco is on the way out. Fewer and fewer people want to enjoy nicotine through the traditional method of burning and inhaling tobacco smoke. However, the consumption and enjoyment of nicotine through other means is far from at a dead end. With the health threats of cigarettes universally known, consumers are looking for safer ways to get their fix – and removing the combustible element massively reduces the potential risks. The recent explosion in popularity of electronic vaporiser cigarettes attests to this. Swedish Match, under the leadership of Dahlgren, has accepted this trend and acted according.

Dahlgren’s strategy as CEO has not been to batten down the hatches and defend smoking from the ever-growing regulation of governments around the world, amid a general decline in use. Rather, he has taken the initiative to push Swedish Match to develop its focus away from conventional cigarettes.

Striking the match

Even before its divestment, Swedish Match was always more than just a cigarette producer. The company is over 100 years old; its origins lie in two firms founded in Sweden in the early 20th century, one producing tobacco products and the other matches and lighters. Svenska Tobaksmonopolet, founded in 1915, started to produce tobacco as a monopoly firm, while Svenska Tändsticks was founded in 1917 and produced matches. The two firms joined together in 1992, under the Procordia Group, before merging into the company that exists today – Swedish Match. As of 1996, Swedish Match has been listed on the Nasdaq Stockholm exchange. In 2015, it had total revenue of €1.5bn, and an operating income of over €425m.

With its nearly 5,000-strong workforce, Swedish Match sells its products worldwide, in more than 100 countries. The firm’s snus products have a majority market share in both Sweden and Norway, and its other products also enjoy market dominance further away from home. Swedish Match’s Redman chewing tobacco has a 40 percent market share in the US, while its cigar products hold almost 25 percent. Its matches and lighters are leaders in a wide range of markets, including the UK, various Scandinavian nations, France, Spain, Australia, Brazil, Russia and France.

Dahlgren himself has worked his way up since joining the company shortly after graduating, as an assistant controller. Now aged 46, Dahlgren climbed to the top through first reaching the position of CFO in Swedish Match’s Philippines office, before working for a few years in the firm’s group finance division. Finally, in 2004, he gained an executive role, serving as the head office’s CFO in Stockholm. Four years later, in 2008, he was appointed CEO. Dahlgren hopes to dispel the myth that tobacco companies are led by out-of-touch traditionalists, clinging to what is left of a declining and increasingly unfashionable market.

“I think many people perceive the tobacco industry as conservative and middle-aged”, he said in an interview with the Swedish Match website. “At Swedish Match, it is the complete opposite; we constantly strive to think in a youthful and innovative manner in everything we do.”

Adapt and improve

As the result of a merger between a firm producing lighters and matches, and another producing tobacco products, Swedish Match has a wider product base than most tobacco companies. At the same time, its production of the uniquely Swedish snus means its tobacco-producing arm is also more varied.

In a world of reduced smoking levels and increased tobacco control – with policies regulating and discouraging smoking from local government councils all the way up to national governments and beyond – Swedish Match’s diverse product base gives it an edge. Rather than fighting the tide of anti-smoking campaigns, it has even embraced it, seeing it as an opportunity to gain market share for its non-smoke tobacco products.

In 1996, when the company first became publically listed, its “smokeless tobacco business consisted of chewing tobacco and moist snuff in the US, and snus in Scandinavia”, said Dahlgren. Now, however, snus products have seen growing sales, particularly in the US. This has been part of a drive to focus on non-cigarette tobacco products. “Today, Swedish Match is truly a different company with a truly different vision.”

According to Dahlgren: “Swedish Match adapts and thrives.” And, in a world of smoking cessation, it is doing both. As he has noted: “In line with our strategic focus and vision, we are working diligently and enthusiastically to facilitate the trend and goal of a world without cigarettes.” And the adaptation seems to be working: snus products now account for more than 50 percent of Swedish Match’s operating profits.

Dahlgren said that now, “in line with our strategic focus and vision, we are working diligently and enthusiastically to facilitate the trend and goal of a world without cigarettes”. The company has taken clear steps towards this, gradually divesting from smoking products. It has already wound up its cigarette operations and, in January 2015, the company took the decision to reduce its shareholding in Scandinavian Tobacco Group, a cigar-producing firm. The company was founded in 2010, and Swedish Match previously owned 49 percent of it, which has now been cut to 31.2 percent.

Snus is, of course, still a tobacco product, meaning it still has some associated health risks. However, it remains much safer than cigarette smoking. In spite of this, many anti-smoking campaigns and local authorities have attempted to clamp down on non-smoking tobacco products. As Dahlgren has noted: “We face challenges through product taxation, regulation, and even the efforts of anti-tobacco organisations.” However, Swedish Match has taken steps to work towards remedying this through the relevant authorities. In the US, for instance, the firm has made an application to the US Food and Drug Administration (FDA) for its snus products to be classified as a Modified Risk Tobacco Product, allowing them to potentially escape certain punitive anti-smoking regulations.

Across the Atlantic

This attempt at a US reclassification is also part of Dahlgren’s forward-looking strategy. The US is seen as a key market for Swedish Match to expand into with its snus products; already a key market for chewing tobacco, Swedish Match has identified it as having a strong potential to become a large destination for snus.

The US is one of the few places in the world where the use of chewing tobacco has gained widespread use and cultural status. However, Americans are increasingly turning away from the product; Swedish Match estimated that in 2014 the company had a 40 percent market share for chewing tobacco in the US, representing an eight percent decline from 2012. Likewise, 2015 saw further a decline in sales volumes. Although Swedish Match owns Red Man, the market-leading premium brand in the US, it recognises use of the product is in decline. For this reason, alongside the decline of smoking, Swedish Match is gearing a lot of its efforts towards expanding its snus market in the US.

Swedish Match’s various snus products saw good growth in the US market last year. “For snus and moist snuff in the US, the General snus brand had good growth in both consumption volumes and market share, and the overall snus market experienced more rapid growth”, said Dahlgren. Dahlgren put the increased popularity of the product down to “its taste, its quality, and its benefits versus smoking”.

While Swedish Match’s application for Modified Risk Tobacco Product status is still awaiting approval, Dahlgren appears confident that it will be achieved. “While we are still awaiting an FDA decision, we were very pleased to see that Swedish Match this past year was the first and so far only tobacco company to have received product approvals under the pre-market approval process of the FDA”, he said. With its pre-existing brand dominance and its acceptance of changing market conditions, Swedish Match is well positioned to grow its snus sales in the US market. It has recognised which tobacco products are on the decline, and has focused its energies accordingly, as well as working with regulators in order to ensure lighter regulation of its products.

Nicotine Addiction Clinical Presentation

Nicotine addiction is now referred to as tobacco use disorder in the Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition (DSM-5). [2]

There are 11 possible criteria, of which at least 2 must be present in the last 12 months:

1. Tobacco taken in larger amounts or over longer periods of time
2. Persistent desire or unsuccessful efforts to cut down or control use
3. A great deal of time is spent on activities necessary to obtain or use tobacco
4. Craving or a strong desire or urge to use tobacco
5. Recurrent tobacco use resulting in a failure to fulfill major role obligations at work, school, or home
6. Continued tobacco use despite having persistent or recurrent social or interpersonal problems caused or exacerbated by effects of tobacco (eg, arguments with others about tobacco use)
7. Important social, occupational, or recreational activities are given up or reduced because of tobacco use
8. Recurrent tobacco use in situations in which it is physically hazardous (eg, smoking in bed)
9. Tobacco use is continued despite knowledge of having a persistent or recurrent physical or psychological problem that is likely to have been caused or exacerbated by tobacco
10. Tolerance, as defined by either the need for markedly increased amounts of tobacco to achieve the desired effect or a markedly diminished effect with continued use of the same amount of tobacco.
11. Withdrawal, as manifested by either the characteristic withdrawal syndrome or the use of tobacco to relieve or avoid withdrawal symptoms.

Symptoms of withdrawal include difficulty concentrating, nervousness, headaches, weight gain due to increased appetite, decreased heart rate, insomnia, irritability, and depression. These symptoms peak in the first few days but eventually disappear within a month.

Symptoms of nicotine toxicity, otherwise known as acute nicotine poisoning, include nausea, vomiting, salivation, pallor, abdominal pain, diarrhea, and cold sweat.

A previous history of depression, use of antidepressants in the past, and onset of depression during previous attempts to quit smoking should be obtained.

The time to first cigarette and total cigarettes per day are the 2 strongest predictors of nicotine addiction. The nicotine dependence and nicotine withdrawal could be treated by means of the following [4, 29] :

• Other forms of nicotine delivery
• Drugs that selectively target one or more of the underlying mechanisms
• Behavioral treatments, acupuncture, and other therapies

LCQ20: Regulation of e-cigarettes

Hong Kong (HKSAR) – Following is a question by the Dr Hon Priscilla Leung and a written reply by the Secretary for Food and Health, Dr Ko Wing-man, in the Legislative Council today (June 15):


In 2014, the World Health Organization issued a report proposing to bring electronic cigarettes (e-cigarettes) under regulation. Since then, a number of countries have enacted legislation to regulate e-cigarettes. Earlier on, the media captured photographs of a girl smoking a fruit-flavoured e-cigarette in a public place, causing some members of the community to worry about the increasing popularity of smoking e-cigarettes among young people and children in Hong Kong. They are of the view that there is an urgent need to regulate the manufacture, import, sale, distribution and publicity of e-cigarettes (including e-cigarettes not containing nicotine).In this connection, will the Government inform this Council:

(1)as the Food and Health Bureau (FHB) submitted a paper to the Panel on Health Services of this Council in as early as May last year indicating that the Government would study the enactment of legislation to regulate e-cigarettes, and the officials from the Bureau have reiterated such intention to the media in recent months, and quite a number of members of the community have also requested for expeditious enactment of legislation, of the timetable and details of such legislative work, and whether the authorities will undertake to introduce the relevant bill to this Council within this year;

(2)given that quite a number of e-cigarettes and e-cigarette liquid are currently sold on the Internet, how the Government has planned to regulate the online sale of e-cigarettes;

(3)whether it has studied how overseas legislation and relevant initiatives which regulate e-cigarette products not containing nicotine; if it has, of the details, as well as the provisions and initiatives which are of reference value to Hong Kong; and

(4)as it was discovered in a survey commissioned by FHB and conducted by the University of Hong Kong in the past two years that 2.6% of primary school students and 9% of secondary school students indicated that they had smoked e-cigarettes before, whether the authorities have launched publicity exercises targeting both secondary and primary school students on the perils of smoking e-cigarettes; if they have, of the details; if not, the reasons for that?



My reply to the questions raised by the Dr Hon Priscilla Leung is as follows:

(1)According to the Pharmacy and Poisons Ordinance (Cap. 138), e-cigarettes containing nicotine are considered pharmaceutical products.They have to comply with the relevant requirements on safety, quality and efficacy, and must be registered with the Pharmacy and Poisons Board of Hong Kong before they can be put up for sale or distribution in Hong Kong.Under the same ordinance, nicotine is categorised as Part 1 poison which can only be legally possessed or sold by licensed medicine dealers, including “licensed wholesale dealers” and “authorised sellers of poisons”. Illegal possession or sale of Part 1 poisons or unregistered pharmaceutical products is an offence.Any person convicted of the offence is liable to a maximum fine of $100,000 and imprisonment up to two years.

In addition, under section 3 of the Smoking (Public Health) Ordinance (Cap. 371), no person is allowed to smoke or carry a lighted cigarette, cigar or pipe in a no-smoking area, and “smoke” is defined as “inhaling and expelling the smoke of tobacco or other substance .”As such, smoking of e-cigarettes or similar products in a statutory no-smoking area is an offence.

We are discussing the legislative arrangements with relevant departments. It is expected that the amendment bill, which aims to completely prohibit the import, manufacture, sale, distribution and advertising of e-cigarettes, will be introduced for the scrutiny of the Legislative Council in 2016-17.

(2)The legislative proposal to regulate e-cigarettes being considered by the Government will apply to all sale activities of e-cigarettes, whether they are conducted physically or online.The Department of Health (DH) has put in place an established mechanism to monitor the drugs supplied on the market (including the Internet).The DH will carry out investigations upon receiving information about suspected illegal possession or sale of unregistered pharmaceutical products or Part 1 poisons, and take joint actions with the Police or make test purchases where necessary. Legal actions will be taken if any irregularities are detected.

(3)We note that other jurisdictions such as Singapore, the United States, the United Kingdom and a few other countries have planned / adopted measures to either regulate or completely prohibit the import, distribution and sale of e-cigarettes. We will study in details the regulatory approaches adopted by different jurisdictions and formulate a suitable tobacco control policy in the light of the actual situation in Hong Kong.

(4)The Tobacco Control Office (TCO) of the DH has, by producing and broadcasting more new TV and radio Announcements in the Public Interest, stepped up publicity to increase public awareness of the potential harm in using e-cigarettes.The TCO has also produced information leaflets and posters, and uploaded the relevant information to its website for reference of the public and healthcare personnel.To discourage the use of e-cigarettes among young people, the TCO has also strengthened education on the potential harm of e-cigarettes.By sending letters, promotional leaflets and posters to all primary and secondary schools in the territory, the TCO has advised schools to remind their students not to use e-cigarettes.In collaboration with various non-governmental organisations, the TCO also promotes smoke-free lifestyle and disseminates the message of abstaining from e-cigarettes in kindergartens as well as primary and secondary schools.The Government will continue its health education work to prevent the general public and students from starting to use e-cigarettes.

‘Suara Hati Anak’ Anti-Smoking Campagin Aims to Increase Public Awareness of Tobacco- Caused Diseases

Jakarta. Indonesia’s health ministry and Vital Strategies, an international organization focusing on research activities on priority public health issues, launched a campaign called “Suara Hati Anak” (Voices of Children), to increase public awareness of the impacts of smoking.

In a statement to the Jakarta Globe recently, Vital Strategies said the campaign involves placing advertisement in national media from May 27 until June 10 this year, uploading campaign videos on YouTube, promoting the hashtag #SuaraTanpaRokok on social media and updating the website

This is the fourth collaboration between Indonesia’s health ministry and the organization.

“Tobacco consumption creates public health problems that will require priority assistance. Cigarettes contribute as one of the main causes of deaths in Indonesia. We can prevent this by encouraging the younger generation to give up smoking,” Health Minister Nila Moeloek said in a statement from Vital Strategies.

Vital Strategies is an affiliate of The Union, an international nonprofit scientific organization based in the United States that helps low-and-middle income nations fight tuberculosis, HIV, asthma and other lung diseases through technical assistance, education and research.

According to Vital Strategies President and Chief Executive Officer José Luis Castro, “the poorest families in Indonesia spend nearly 12 percent of their income on cigarettes. As shown in the campaign, their welfare and the kids’ future prospects will be affected if the breadwinner falls sick from smoking.”

Castro cited a report from the World Economic Forum which showed smoking is one of the main factors of non-contagious diseases that could drain $4.5 trillion from the Indonesian economy from 2012 until 2030.

Meanwhile, the World Health Organization’s (WHO) Tobacco Atlas showed more than 217,400 people die every year in Indonesia from smoking-related diseases.