Tobacco Giant Settles Investigation

(Reuters) – Tobacco giant Philip Morris International (NYSE:PM)'s subsidiary Swedish Match North America (SMNA) will pay $1.2 million to settle an investigation into violations of Washington D.C.'s flavored tobacco ban.

The District of Columbia attorney general's office found evidence that SMNA facilitated online sales of "tens of thousands" of flavored Zyn nicotine pouches to D.C. consumers between October 1, 2022, when the ban was enacted, and June 30, 2024.

PMI, which acquired a 90% stake in Swedish Match for $16 billion in November 2022, must now monitor its distributor's compliance with D.C.'s ban quarterly and stop sales of flavored Zyn pouches through Zyn.com and related e-commerce platforms, according to the AG's office.

Nicotine pouches have become the second most commonly used tobacco product in the U.S., with 890,000 students reporting usage in 2024, according to a report by the Centers for Disease Control and Prevention.

The tobacco giant had suspended sales on Zyn.com after being subpoenaed by the D.C. attorney general earlier this year. Swedish Match will continue focusing on its brick-and-mortar stores, PMI stated.

Sales of Zyn, which PMI claims does not contain tobacco, have surged, growing 41.1% in PMI's latest quarterly results. The company has been moving beyond traditional cigarettes and expanded production to address Zyn supply shortages amidst a growing black market for nicotine pouches.