(Reuters) – Tobacco giant Philip Morris International (NYSE:) said on Monday it will suspend online sales nationwide at Swedish company Match North America’s ZYN.com site as nicotine pod maker Zyn responds to a subpoena from the District of Columbia ( Columbia region).
Philip Morris bought Sweden’s Match for $16 billion in 2022 as the company sought to reduce its dependence on cigarettes amid stricter regulations and a consumer shift to alternatives to tobacco and traditional cigarettes.
Swedish company Match North America has received a subpoena from the District of Columbia Attorney General seeking information about its compliance with the District of Columbia’s 2022 ban on the sale of all flavored tobacco, the company said.
In October 2022, the District of Columbia banned the sale of all flavored tobacco products, including flavored synthetic nicotine products.
Philip Morris stated that it intends to comply with DC’s request and that financial liability is reasonably possible in the event of an unfavorable outcome in this matter.
The company said its preliminary investigation indicates that sales of flavored nicotine pods have occurred in the District of Columbia, primarily associated with certain online retail platforms and certain independent retailers.
“Swedish Match is conducting a full review of its sales arrangements and supply chain in the District of Columbia and other US locations where flavor bans may apply, and is temporarily suspending all sales on ZYN.com until this assessment is completed,” a Philip Morris spokesperson told Reuters. .
Philip Morris has benefited from strong demand in the US for Zyn nicotine pouches, which the company says contain no tobacco.
According to first-quarter results released in April, shipments of Zyn’s nicotine pods were up nearly 80% from a year earlier. However, sales on ZYN.com represent “a very small percentage of Zyn’s nationwide volumes,” the company added Monday.