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Snuff firms sniff a profit in smoking bans By Jorn Madslien BBC News Online business reporter in Oslo, Norway For Europe's beleaguered smokers, it sounds too good to be true: a satisfying hit of tobacco, without the smoke that so gets up everyone's noses. On that logic, snus - a moist plug of snuff-style tobacco, which Scandinavians insert under their upper lips - ought to be gearing up for a boom. Snus makers have already seen sales soar in Norway, where a ban on smoking in public places was introduced in June; now, they hope to repeat the experience around the world. "You will see more and more smoking bans," predicts Bo Aulin of Swedish Match, the dominant snus manufacturer. "We offer something a smoker can appreciate instead of cigarettes and still enjoy tobacco," he says, describing snus as a "product that can contribute to a positive development" by helping people pack in smoking. Up to snuff In Swedish Match's homeland, the industry portrays snus as an energy boosting stimulant which is becoming increasingly popular among the most discerning nicotine addict. It looks hellish, it tastes hellish and it smells hellish. But then, so does smoking Norwegian snus entrepreneur "Nowadays, snus users have a higher income and are better educated than the average population. With smokers, it is the opposite," says Jonas Engwall, co-founder of Sweden's Skruf Snus. Indeed, across both Norway and Sweden, snus has undergone a remarkable transformation from being a working class tobacco product, traditionally favoured by truck drivers, fishermen and forestry workers. The black stuff has become a fashion accessory among the young and trendy who associate cigarettes with low income, low education and bad health. As a consequence, snus makers predict double-digit growth in demand for several years to come. An ill wind Upstarts are getting in on the act. One Oslo-based entrepreneur, who is preparing to get in on the action, openly acknowledges that the industry's collective optimism seems to defy logic. "It looks hellish, it tastes hellish and it smells hellish", he says. "But then, so does smoking." The entrepreneur, who wants to remain anonymous until he launches his company, points out that snus use among Norway's 16-to-24-year-old men more than trebled between 2002 and 2003, while smoking slipped back. Last year alone, snus sales rose 15%, and about one in 10 young men in the country now uses snus, according to industry figures. So although Norwegians consume just 15 million cans of snus a year, seriously lagging Sweden's 190 million cans, it is catching up fast. Norway's smoking ban is what has really got the ball rolling. Two of the country's major retailers reported a 30-40% rise in snus sales in June. Now, the UK, Germany and the rest of the European Union are firmly on the industry's radar, as is the US, Russia and Asia. Ireland has banned smoking in public places, and other EU members states are expected to follow. A dash of cranberry As part of its ascent within egalitarian Norway and Sweden's near invisible class systems, the snus industry has dramatically modified and sanitised its products. Although snus remains popular in its loose form - just as roll-up cigarettes are still selling well - about half the snus market is now served by more hygienic pouches that look like small teabags. "The pouches are whiter and drier and cleaner and look more attractive," Mr Aulin says. Modern portion snus sometimes comes flavoured with cranberry, orange or mint, and they are often wrapped in feminine-looking white or pink cans. This, the industry believes, should appeal to consumers outside Scandinavia, just as it has helped break down gender barriers in their home markets. There are now 200,000 female snus users in Sweden, and Norwegian women are following suit, Mr Engwall says. Brussels broadside The snus industry's latest swagger marks a remarkable change from its timid behaviour a decade ago when, in 1992, snus was banned by the EU. The ban raised fears that its main markets would be wiped out overnight if Norway and Sweden were to join the Union. In the event, only Sweden signed up, in 1995, and only after negotiating an exemption from the EU ban. The industry now hopes that the ban will be lifted altogether by the European Court of Justice. After all, the industry argues, the former warning label which claimed that snus could cause cancer was replaced by the EU in 2001 with one that says "snus could harm your health and is addictive". "They can't prove that it's dangerous", adds Mr Engwall. In fact, Mr Engwall is prepared to go much further: "Many lives could be saved if Europeans swapped cigarettes for snus," he insists. Courtroom crunch-time Such claims have enraged health ministry officials, in particular in Norway where the industry is making such dramatic inroads, and in Finland, where there is a substantial black market for snus. Norwegian health authorities insist that not enough is known about this potential health hazard, so even though it might be less dangerous than cigarettes it would be better to avoid both tobacco products. Tuula Pynnae, who represents the Finish Government in the European Court, agrees. "Nowadays snus attracts young people in particular. In Finland, the snus use has spread especially among young athletes," she says. "It follows from the difference in the way of using that the health effects of cigarettes and snus are also different. "This, however, does not mean that snus is harmless." The Advocate General is due to give his opinion on the issue on 7 September; if he is in favour of maintaining the ban, the snus industry's European ambitions may well be snuffed out pretty quickly. 7 September 2004: The Advocate General said he did not believe the EU-wide snus ban should be lifted. Experts say this is a clear indication that the ban will remain in place, though the Advocate General insisted that the EU should come up with a strong reason to maintain it. Swedish Match vowed to continue fighting the ban and stressed that the Advocate General's advice is not binding on the court. "We believe that this recommendation fails to properly take into account several of the issues," said chief executive Sven Hindrikes. A court ruling is expected by early next year. Story from BBC NEWS: http://news.bbc.co.uk/go/pr/fr/-/1/hi/business/3758939.stm Published: 2004/09/06 07:20:06 GMT BBC MMIV Jackie

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