Slow development in the snus industry leads to the end of the joint venture between Swedish Match and Philip Morris International.
Swedish Match (SWMA) and Philip Morris International (PMI) have decided to dissolve their joint venture in the sale of smokeless tobacco products outside Scandinavia and the U.S.
Although the venture will come to an end, the companies will continue their individual sales ventures.
· Swedish Match will continue to sell General snus in Canada, Russia and Malaysia
· Swedish Match sees good opportunities for its snus products internationally over the longer term
The joint venture SMPM International (owned on a 50/50 basis by Swedish Match and PMI) was established in 2009 with an aim to commercialize snus outside Scandinavia and the U.S. Within the scope of the joint venture, Swedish Match has developed and produced snus products, which have then been sold through the PMI organization. Both companies have licensed trademarks to the joint venture. The joint venture most recently has been selling snus in Canada, Russia, Israel and Malaysia. Costs for joint venture activities have been shared 50/50.
There is a small but growing demand for snus in current joint venture markets. The development has, however, taken longer than the parties had initially anticipated. As a consequence the parties have mutually agreed to dissolve the joint venture.
Swedish Match and PMI will now focus on independent strategies for the commercialization of snus in the former joint venture territory. Trademark licenses will revert to the original owners, and separate transitional agreements have been signed whereby Swedish Match will supply snus products to PMI for certain markets and PMI will perform distribution services on behalf of Swedish Match in Canada and in Russia.
“We appreciate the hard work and efforts of all involved in the SMPM International joint venture. We have attained valuable insights, and are pleased to see that snus has been viewed by many outside of our core markets as a viable alternative. We look forward to continuing to build our knowledge and work toward further developing our snus business globally,” said Lars Dahlgren, president and CEO of Swedish Match.