Tag: European Commission

  • EU Commission OKs Swedish Match Deal

    EU Commission OKs Swedish Match Deal

    Photo: Destina

    The European Commission has approved the proposed acquisition of Swedish Match by Philip Morris International.

    In a statement on its website, the Commission noted that Swedish Match holds a de facto monopoly on distribution of tobacco and nicotine products in Sweden through its subsidiary SMD Logistics.

    The Commission’s preliminary investigation showed that SMD Logistics has a dominant position in the supply of combustible tobacco, smoke-free and related products in Sweden.

    The Commission found that the transaction could have led to foreclosure effects in Sweden, given that SMD is the only distributor of combustible tobacco, smoke-free and related products in Sweden. It did not find competition concerns in other markets in which the parties compete, including the manufacture and supply of snus in Sweden and Norway and of nicotine pouches in Sweden and Slovenia, as sufficient alternative suppliers would remain active following the transaction.

    To address the Commission’s preliminary competition concerns, PMI offered to divest Swedish Match’s logistics arm, SMD Logistics.

    The commitments consist of the structural divestiture of a stand-alone business, which fully removes the vertical links between the manufacture of tobacco and nicotine products and their distribution in Sweden. This will enable a purchaser to run the divested business as a viable competitive force in the market on a lasting basis.

    The Commission said it will closely monitor the divestment process, including the choice of a suitable purchaser for the divested business that will have to be approved by the Commission.

    Following the market test, the Commission concluded that the transaction, as modified by the commitments, would no longer raise competition concerns.

    Earlier, PMI’s proposed acquisition received a green light from authorities in the United States and Brazil.

    “We are pleased to have received all necessary regulatory approvals and believe the best and final price in our revised offer for Swedish Match provides very compelling value for the shareholders of both Swedish Match and PMI,” said PMI CEO Jacek Olczak in a statement.

    “The revised offer retains a 90 percent acceptance condition, which is critical to capture the full potential of the combination. Should the offer fail, we are well prepared to proceed autonomously to develop IQOS and the rest of our smoke-free portfolio in the U.S.”

  • PMI Extends Swedish Match Bid Deadline

    PMI Extends Swedish Match Bid Deadline

    Photo: xtock

    Philip Morris Holland Holdings (PMHH) has extended the acceptance deadline of its $16 billion offer for Swedish Match to Nov. 4, 2022, as it awaits merger control approval from the European Commission.

    In May, PMI offered to buy the Stockholm-based company to help accelerate its move to cigarette alternatives. Swedish Match is best known for its oral tobacco products, including snus and the Zyn tobacco-free nicotine pouches that have taken the U.S. market by storm.

    The completion of the offer is conditional upon regulatory approvals. PMHH says it has already received the green light in the United States and Brazil but is still awaiting approval from the European Commission, which started its formal review on Sept. 6, 2022. PMHH decided to extend the deadline because it does not expect the Commission to complete its review until late October.

    This is the second deadline extension. In early September, PMHH extended its initial Sept. 30 deadline to Oct. 11, based on its assessment of the European Commission’s progress with the review at the time.

    According to PMHH, the other terms and conditions of its offer remain unchanged. “We believe our offer remains very compelling—particularly given the current market environment,” said Jacek Olczak, chief executive officer of Philip Morris International, in a statement. “We look forward to completing the transaction while also continuing to actively progress on our strategic alternatives to Swedish Match, should the offer ultimately prove unsuccessful.”

  • EU Registers ‘Smoke-Free’ Citizens’ Initiative

    EU Registers ‘Smoke-Free’ Citizens’ Initiative

    Photo: areporter

    The European Commission has registered a European Citizens’ Initiative (ECI) to “achieve a tobacco-free environment and the first European tobacco-free generation by 2030.”

    The ECI urges the Commission to propose legislation banning the sale of nicotine products to people born in or after 2010 and to act against the environmental risks presented by tobacco use.

    The ECI also calls on measures to reduce cigarette litter, extend outdoor vaping restrictions and to eliminate tobacco advertising.

    By registering the ECI, the Commission acknowledges that it is legally admissible without expressing a view on the substance of the initiative.

    The organizers of the ECI now have six month start collecting signatures. If the initiative receives at least 1 million statements of support from citizens in at least seven EU member states within one year, the Commission will have to respond.

    The Commission can at that point take the request forward or reject it. If it rejects the ECI, the Commission will have to explain its reasoning.

    Introduced with the Treaty of Lisbon in 2007, the ECI initiative was created to increase direct democracy by empowering EU citizens to participate directly in the development of the union’s policies.

    Since the beginning of the ECI, the Commission has received at least 118 requests to launch ECI, 91 of which were admissible and thus qualified to be registered.

  • EU to Review Feedback on Tobacco Framework

    EU to Review Feedback on Tobacco Framework

    Photo: mbruxelle

    The European Commission has collected feedback from almost 25,000 organizations, experts and citizens about its legislative framework for tobacco control. Its initial call for evidence feedback period ended June 17.

    The Commission will use the feedback to evaluate to what extent the legislative framework has fulfilled its goals and whether it is able to support a “tobacco-free generation” by 2040, as announced in Europe’s Beating Cancer Plan.

    Participants included organization such as the Independent European Vaping Alliance (IEVA), which identified several opportunities for improvement.

    “The European e-cigarette market is one of the most regulated and safest worldwide. IEVA supports the tobacco product directive which has allowed for safe products to be made available to EU consumers. These rules have prevented irresponsible business—as we unfortunately have witnessed in the U.S., where the vaping market was not regulated—and whose behaviors we most vehemently condemn,” the IEVA wrote in a statement.

    “We would like to use this submission to present areas that merit further consideration through the process of evaluating the Tobacco Products Directive which we believe have not been addressed through the process thus far. We will focus on three core areas which we believe need to be further explored in any discussion about a legislative review: the impact on smokers, the impact on SMEs [small and medium-sized enterprises] and employment, and the impact on illicit trade.”

    The IEVA’s full contribution can be viewed here.

    The European Commission will hold a public consultation in the fourth quarter of 2022 and anticipates adoption in the second quarter of 2023.

  • Tobacco industry has little to fear from EU TPD proposals

    The European Commission believes that its proposed revisions to the Tobacco Products Directive would, if adopted, have limited adverse impact on the tobacco industry – and some positive impacts.

    “The adoption of the proposal for a revised Tobacco Products Directive was preceded by a thorough impact assessment, including an assessment of the economic impacts on the tobacco industry, their upstream suppliers (e.g. growers, ingredients suppliers, paper industry) and downstream distributors (wholesale, retail),” the commission stated in a written answer to questions posed by the Czech MEP, Ivo Strejček.

    “It is estimated that the proposal will result in a reduction in the consumption of tobacco products of no more than 2 percent within a five year period following the transposition of the Directive. The adverse impact on the industry would therefore remain limited. Jobs lost in the production of cigarettes would be offset by the creation of jobs in other sectors, reflecting ex-smokers’ expenditure on such sectors.

    “In addition, the proposal is expected to lead to some benefits for the industry through reduced production costs as a result of harmonization (one … production line instead of different production lines to comply with different national rules) and through the expected reduction in illicit trade (as a result of the proposed measures on tracking and tracing of products). Even the most specialized tobacco retailers do not generate more than 50 percent of their revenues from tobacco products, thus the impact is not expected to be disproportionate.”

    The commission said that to avoid imposing an unnecessary burden on small- to medium-sized enterprises, pipe tobacco, cigars and cigarillos were exempted from the stricter labelling and ingredients rules that the revisions proposed for other tobacco products. The proposal, it added, was neutral in respect of the different types of tobacco, Virginia, Burley and oriental. This meant that smaller farms involved in Burley and oriental tobacco production would not be affected.

  • E-cigarettes under threat in EU

    The European Commission has said that the majority of e-cigarettes sold in the EU would most likely fall under pharmaceutical legislation if the commission’s proposed revisions to its Tobacco Products Directive were to be accepted. The commission has proposed that e-cigarettes would fall under the legal framework for medicinal products if they contained levels of nicotine above certain thresholds.

    It is generally thought that, for cost or technical reasons, most e-cigarette companies would struggle to have their above-the-threshold products authorized under pharmaceutical laws, and that below-the-threshold products would be unacceptable to many consumers.

    “The nicotine threshold has been identified by considering the nicotine content of nicotine replacement therapies that have already received a marketing authorization by Member States,” the commission said in a written answer to two questions raised by the Polish MEP, Filip Kaczmarek.

    “For electronic cigarettes below the thresholds, the commission proposal foresees that they carry health warnings. They would also have to comply with the General Product Safety Directive as … is the case at the moment.”