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May, 2007

Curious New Opportunities Arise...

An interesting thing has been happening lately. Non-combustible tobacco products such as snus have found a curious new advocate-not from an international corporation hoping to introduce new product lines, but rather from some corners of the public health sector. Have the anti-smoking folks started to sing a different tune? If the recent (successful) campaign to have Hollywood brand any film "glamorizing" smoking with a restricted ("R") rating is any clue, the answer is an emphatic "no." But perhaps, some of their ilk are becoming less dogmatic.

At the recent Tobacco Merchants Association conference in Virginia, some of the most spirited information sessions came from anti-smoking advocates such as Dr. Jonathan Foulds, director of the Tobacco Dependence Program who see use of smokeless tobacco as a means to cease traditional cigarette smoking. In markets such as Sweden, snus are more popular than cigarettes among male users. Snus are currently prohibited in the rest of the EU (as part of their entrance into the EU, Sweden negotiated for an exemption to the ban as it was a widely consumed product and considered part of their culture), but are gaining popularity in markets such as Norway, South Africa, and the United States (where use of snus have increased 4% per year in the last 5 years).

Some manufacturers are seeing room for growth in a sector that may not gather the same emotionally-fueled regulation as cigarettes have garnered in the past few decades. British American Tobacco is backing snus under the banner of Peter Stuyvesant and Lucky Strike in South Africa, while also introducing them in Sweden, starting sales in Norway, and launching a pilot program in Tokyo. The company plans to introduce the product under established cigarette brands to see if the lines could be further extended into the marketplace. Swedish Match has heralded strong sales of their Catch Dry and General brands in regional test markets in the US as well as South Africa, and R.J. Reynolds introduced Camel SNUS last year. Time will tell.

In other news, it looks like the black sea is continuing its march to becoming a more hospitable place for tobacco capital. Bulgarian state-owned tobacco monopoly Bulgartabac Holding will put three of its factories up for private ownership, while Turkey plans to privatize state-run tobacco firm Tekel after elections this July.

And finally, be sure to start booking those flights to Poland. The dates have been set for EuroTab-Warsaw: June 24-26, 2008 to be held at the Warsaw SKIE Entrum Expo XXI. For those connected with the point-of-purchase industry in the European, Baltic, Central Asian, or Middle Eastern markets, this is a must-attend (see p. 10 in this issue of Distribution International for more information).

- Evan Dashevsky


Tobacco International - May, 2007

Essentra


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