Philip Morris suspends national sales on Zyn.com following subpoena from Washington

(Reuters) – Tobacco giant Philip Morris International said on Monday it will halt online sales of Swedish Match North America on ZYN.com nationwide as nicotine pouch maker Zyn responded to a subpoena from the District of Columbia (DC).

Philip Morris bought Swedish Match in a $16 billion deal in 2022 as the company sought to reduce its reliance on cigarettes amid tighter regulations and a consumer shift to alternatives to tobacco and traditional cigarettes.

The company said Swedish Match North America received a subpoena from the DC Attorney General requesting information regarding compliance with the flavored tobacco sales ban enacted in DC beginning in 2022.

In October 2022, DC banned the sale of all flavored tobacco, including flavored synthetic nicotine products.

Philip Morris stated that it intends to comply with DC’s request and that material liability is quite possible in the event of an unfavorable outcome in this matter.

The company said preliminary investigations revealed that flavored nicotine pouches had been sold in Washington, DC, primarily through certain online sales platforms and some independent retailers.

“Swedish Match is conducting a full review of its distribution and supply chain arrangements in DC and other locations in the U.S. 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 benefited in the US from strong demand for its Zyn nicotine pouches, which the company says do not contain tobacco.

In first-quarter results released in April, shipments of Zyn nicotine pouches increased nearly 80% year-over-year, but sales on ZYN.com represent only a “very small percentage of Zyn volume nationwide,” the company added on Monday.

(Reporting by Juveria Tabassum; Editing by Alan Barona)