‘Zyn’ maker Swedish Match hit with consumer lawsuit over nicotine pouch prices

By Mike Scarcella

Nov 19 (Reuters) - Philip Morris International subsidiary Swedish Match North America is facing a new lawsuit accusing the tobacco giant of substantially overcharging U.S. customers for its popular tobacco-free Zyn nicotine pouches.

The proposed class action, filed on Monday in federal court in Richmond, Virginia, said Swedish Match was violating federal and state antitrust laws in the market for “modern oral nicotine pouches.”

The plaintiff, a Florida resident, alleged Swedish Match attained monopoly power illegally through a series of business actions, including an effort to knock rival Dryft out of the market.

Swedish Match now has an estimated 80% of the market for nicotine pouches, which the company sells in different flavors and strengths for about $6 a tin, according to the lawsuit.

In a statement, Philip Morris, which was not named as a defendant, said "we believe the plaintiff’s claims are without merit, and we intend to vigorously defend against them.”

Attorneys for the plaintiff did not immediately respond to a request for comment.

Marlboro maker Philip Morris in 2022 acquired the Swedish tobacco and nicotine products company for $16 billion.

Philip Morris has stated an ambition to move away from health-harming cigarettes.

The consumer lawsuit in Virginia focused in part on the purchase agreement between Philip Morris and Swedish Match, calling it anticompetitive. The plaintiff asked a the court to force Philip Morris to divest Swedish Match.

The lawsuit also accused Swedish Match of pursuing baseless lawsuits against Dryft, which makes competing nicotine pouches.

Dryft sued Swedish Match in 2022 in federal court in California, accusing it of violating antitrust law. The two sides appear to have settled the lawsuit, which Dryft dismissed last year.

Attorneys in that case did not immediately respond to requests for comment.

The consumer lawsuit seeks class action status for Zyn consumers and damages of more than $5 million.

The case is Neumark v. Swedish Match North America LLC, U.S. District Court for the Eastern District of Virginia, No. 3:24-cv-00821.

For Allen Neumark: Lee Floyd of Breit Biniazan; Jeffrey Brown of Leeds Brown Law; and James Ferraro of The Ferraro Law Firm

For Swedish Match: Not yet available

(Reporting by Mike Scarcella)