Swedish Match to appeal

Swedish Match has said it will appeal against a decision by the Swedish Patent and Market Court that it acted in breach of competition legislation when designing and implementing a product labeling system. The decision comes with a fine of about SEK38 million.

In a note posted on its website, SM said that, during 2012, it had initiated a standardized labeling system in its own snus coolers placed in stores at no cost to the retailers. The aim had been to create an orderly and transparent presentation of snus products in the coolers. Such practice was commonly used for other consumer goods.

‘Both Swedish Match’s and the competitors’ products were to be presented in Swedish Match’s coolers in a standardized manner communicating brand, taste, format and price,’ the note said. ‘Swedish Match’s intention was that the retailers were free to decide themselves whether to use the labels or not.

‘Several international cigarette companies, active also in the snus market, decided to raise a complaint against the labeling system with the Swedish Competition Authority. The authority carried out an investigation, and decided in 2014 to file a claim with the Swedish Patent and Market Court. The Swedish Competition Authority claimed that the labeling system was in breach of the competition rules and asked the Court to impose fines on Swedish Match.

‘Throughout the process, Swedish Match has vigorously contested the claim. According to Swedish Match, the labeling system has not had any effect on competition in the Swedish snus market, and neither customers nor consumers have suffered any damage.’

Yesterday, the Patent and Market Court fined Swedish Match about SEK38 million having found that the company acted in breach of competition legislation when designing and implementing the labeling system, though it found also that the labeling system did not have any effect on the market.

“We do not share the court’s assessment and we intend to appeal the judgment to the Swedish Patent and Market Court of Appeal,” said SM general counsel, Marie-Louise Heiman. “It should be noted that this case essentially concerns whether Swedish Match had the right to introduce labeling guidelines for 73.5 x 39 mm labels in its own coolers. Standardized labels are common practice for almost all product categories in stores.

“Our ambition has been to create an orderly labeling system which would help our customers and consumers to get an overview of the wide assortment of snus in our coolers and at the same time ensure that the very strict tobacco legislation is adhered to. We have noticed that marketing of snus in our coolers by other companies often challenges the legislation. We believe that it is both in the interest of Swedish Match and our customers that other manufacturers do not use material in our coolers that is in breach of the tobacco legislation,” said Heiman.