Philip Morris International, a tobacco company, has discontinued the online sale of its popular nicotine pouch brand, Zyn, which is popular among Gen Z and millennials. Philip Morris announced on the 18th that the online sale of Zyn would cease after receiving a subpoena related to banned flavored products in Columbia, the United States.
The company stated that it would comply with government requests, acknowledging that it could face unspecified material liabilities if adverse outcomes related to this issue occur.
Zyn, a product that delivers nicotine through small pouches similar to teabags placed between the gum and upper lip, has become a key growth driver for Philip Morris. This rise in popularity is particularly notable among Gen Z, who have gravitated towards these tobacco-free pouches. The surging demand has even led to a supply shortage, underscoring the product’s success in the market.
The product has become a popular topic on social media among some conservative influencers, and Tucker Carlson, a former Fox News presenter, has criticized restrictions on Zyn sales.
On the other hand, the product has drawn criticism from lawmakers, including Senate Majority Leader Chuck Schumer, for targeting minors.
Philip Morris secured a distribution network in the United States and new cessation products after investing $16 billion in 2022 to acquire Swedish Match, the manufacturer of Zyn.
Afterward, the company strengthened its marketing for Zyn, and during the first quarter, the shipment of pouches to the United States increased by nearly 80% to 131.6 million units.
Jefferies analyst Owen Bennett said, “A valid question will be how many sales come from other online platforms and independent retailers that are not only selling into DC but also potentially other states/localities that have flavor bans,” noting flavor bans on nicotine and tobacco restrictions across 400 localities and five states.
Philip Morris’s stock fell nearly 3.5% in pre-market trading after analysts raised the possibility that the enforcement action could go beyond DC.
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