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How online sales and promotion of snus contravenes current European Union legislation
  1. Silvy Peeters,
  2. Anna B Gilmore
  1. Department for Health, University of Bath, Bath, UK
  1. Correspondence to Silvy Peeters, Department for Health, University of Bath, Claverton Down, Bath BA2 7AY, UK; s.peeters{at}bath.ac.uk

Abstract

Context The European Union (EU) Tobacco Products Directive that bans sales of snus (a form of oral tobacco) in EU countries other than Sweden is currently under review. Major tobacco companies favour the ban being overturned. This study aims to explore compliance with the current ban on snus sales and examines the conduct of online snus vendors, including their compliance with two other EU Directives on excise and tobacco advertising and Swedish legislation banning sales of snus outside Sweden.

Methods To determine who is currently distributing snus via the internet in the EU, searches were carried out in Google, followed by searches in the WHOIS and Amadeus databases. Five online test purchases of snus were made in each of 10 EU Member States using a standardised protocol. Feedback from the test purchases and further analysis of the websites accessed for test purchases were used to critically examine snus retailers' conduct.

Results The majority of online vendors operate from Sweden and target non-Swedish EU citizens. Test purchases were successfully made in all 10 EU Member States; of 43 orders placed, only two failed. Age verification relied only on self-report. The majority of sales applied Swedish taxes, contrary to EU requirements. Copious sales promotion activities, many price based, are incorporated in these websites contravening the EU regulation, and three test purchases were delivered with gifts.

Conclusions Snus is currently being sold on the single market via the internet in contravention of Swedish legislation and three EU Directives. The apparent willingness of the tobacco industry to contravene EU and Swedish legislation and profit from unlawful sales raises questions about their status as stakeholders in consultations on future policy developments. The findings highlight how national and regional tobacco control legislation can be undermined in an increasingly globalised world.

  • Tobacco industry
  • non-cigarette tobacco products
  • public policy
  • harm reduction
  • advertising and promotion
  • smoking-caused disease
  • tobacco industry privatisation
  • former Soviet Union
  • European tobacco control
  • Central and Eastern Europe
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Background

Snus is a form of moist snuff traditionally used in Sweden and, due to the way in which it is manufactured and stored, has lower levels of carcinogens than other smokeless tobaccos.1 ,2 In 2002, Gallaher Group plc (now part of Japan Tobacco International) became the first transnational tobacco company to add smokeless tobacco to its smoked tobacco portfolio by acquiring Swedish snus manufacturer Gustavus.3 Close to a decade after the Gustavus acquisition, all the major cigarette manufacturers, albeit in varying degrees, have entered the snus market. Swedish Match, the only listed smokeless manufacturer yet to be acquired by a major cigarette manufacturer, has now established a joint venture with Philip Morris International to globalise snus sales.4

These market developments are significant given that the issue of snus is currently high on the policy agenda in Europe because the 2001 European Union (EU) Tobacco Products Directive (TPD), which prohibits the sale of snus outside Sweden, is currently under review. This ban, first introduced in 1992, was reaffirmed in the 2001 TPD.5 When Sweden joined the EU in 1995, it was granted an exemption from this ban on the basis that it would ensure that snus would not be placed for sale on the markets of other EU Member States. To this end, Swedish Ordinance 1994:1266 prohibits the export of snus to other EU Member States.6 Consequently, snus can only be legally transported from Sweden to other Member States by someone physically travelling and carrying snus for personal use (or as a gift for personal use).

From September to December 2010, the European Commission ran a public consultation on potential revisions to the TPD.7 Online snus vendors have been encouraging customers to write to Members of the European Parliament and the EU Commissioner for Health and Consumer Policy to voice their opposition to the ban.8 ,9 Although consultation responses were not made publicly available, the Commission recently reported that most tobacco industry respondents were in favour of lifting the EU ban on snus and claimed that snus use can be an effective way to reduce or quit smoking.10

A July 2010 European Commission report suggested that snus appears to be available via the internet through the EU but that no data exist about where vendors operate from.6 In November 2010, Finland's ASH and the Cancer Society of Finland requested an enquiry into online snus sales with the Swedish International Prosecutor, based on two Finnish purchases made in April 2009 and September 2010 (http://www.snusworldwide.com./fi). To date, no published peer-reviewed studies have examined online snus sales in the EU and no study has critically assessed the conduct of online snus vendors.

This study aims to explore compliance with the current ban on snus sales and examines the conduct and location of online snus vendors. In so doing, it aims to inform debates around revisions to the TPD and to assess broader implications given growing interest in the snus market globally. Two further aspects of EU legislation are noteworthy. First, Directive 2008/118/EC concerning the general arrangements for excise duties, which states that excise products supplied from one Member State directly to a customer in another Member State (known as distance selling) are subject to excise tax and Value Added Tax (VAT) in the Member State where the customer receives the goods.11 Second, Directive 2003/33/EC, which outlaws tobacco advertising across Member State borders including online advertising.12 We sought to explore compliance with these two pieces of EU legislation, as well as the TPD.

Methods

Google search for online vendors

To scope the online availability of snus and determine who is currently distributing snus via the internet in the EU, the authors initially searched for ‘buy snus’ at http://www.google.co.uk on 25 October 2010, yielding >60 000 results. The purpose of this exercise was to scope the online sales presence of snus, not to provide a comprehensive list of online snus vendors, and thus, we only reviewed the first 300 Google search results (at this stage, the results became saturated and did not yield any new websites). The WHOIS Database at http://www.domaintools.com was then queried to identify the vendors behind the websites. Where the domain owner was a company, further searches were carried out in the Amadeus Database (accessed at the British Library Business & IP Centre in London on 26 November 2010) to gather additional information on the company.

Snus test purchases

To demonstrate that snus is not just available online, but sold to EU residents, test purchases were made between May and November 2010 in a purposive sample of 10 EU Member States; Czech Republic, Germany, Greece, Ireland, Italy, Poland, Portugal, Slovakia, Slovenia and UK. Finland was deliberately excluded as buying snus online became a criminal offence there from October 2010.13 Test purchasers were volunteers recruited through existing professional and personal contacts of the Tobacco Control Research Group at the University of Bath. All were familiar with accessing the internet, although their knowledge of snus varied from some to no knowledge at all. To understand how easy it is to locate and buy snus online, we asked test purchasers to conduct their own searches, using search engines and terms of their choice, to identify online snus vendors. We then asked them, if feasible, to buy snus from five different outlets. They were requested to forward the vendor's order confirmation and/or invoice to the authors, answer a few basic questions about their experience: ‘which vendor did you buy from’, ‘did you find the ordering process easy to understand’, ‘were you ID checked and how’ and ‘what postal service was used?’ and to share further observations they considered useful to the research. All contact between the authors and test purchasers took place via email.

Further analysis of test purchase websites

Between November 2010 and March 2011, we further examined the websites that the test purchasers had used to buy snus in order to determine whether vendors were targeting non-Swedish audiences, using promotions to encourage sales or attract new customers, and whether they made explicit statements on how taxes would be applied. In addition to the latter, we used the invoices to calculate how taxes were levied.

Results

Online vendors

The authors' preliminary Google search identified 80 websites selling snus. This is not an exhaustive list; we only reviewed the first 300 Google search results, and although the results became saturated at this stage and did not yield any new websites, the test purchasers reported an additional six websites (possibly via different search terms including different languages). All 80 websites (domains) were traced back to a small distinct group of vendors (table 1). The vast majority of these vendors operate from Swedish territory. Swedish Match website http://www.generalsnus.com (promoting its premium snus brand General) links directly to several websites operated by the top four vendors identified in table 1.

Table 1

List of online vendors marketing snus to European Union audience

In five instances, it was impossible to ascertain the true identity of the vendor. The owner of http://snuscentral.com appears to have paid a fee for private domain registration as their details were hidden from public view, the WHOIS Database does not keep records on http://www.snus2.se for reasons unbeknownst to the authors and three domain names (http://www.dosnus.com, http://www.snusdirect.com and http://snus.net) are owned by individuals with no apparent links to registered commercial enterprises.

One inconsistency in regard to domain name http://swedishsnus.com, ostensibly owned by vendor Mysnus AB, is noteworthy. According to an announcement on http://swedishsnus.com (accessed on 18 May 2011), Mysnus AB took over ‘operations’ of this website from Swedish Match in November 2009. Yet WHOIS records still show Swedish Match as the domain owner. A recent visit to the website on 7 December 2011 revealed that the website no longer sells snus but instead automatically redirects to http://www.svensktsnus.se, a Swedish Match website, promoting (in English) snus use and Swedish Match products.

Test purchases

Forty-three of a possible 50 test purchases were attempted across the 10 EU Member States (table 2). In Greece, Italy and Slovenia only two, two and four attempts, respectively (rather than five), were made. There is no indication that the Greek and Slovenian disparity from the protocol was associated with difficulty locating online snus stores. The test purchaser in Italy reported that running a Google search for ‘comprare snus Italia’ easily located only two websites selling snus but linked to blogs and social networks where advice (in Italian) on buying snus could be obtained.

Table 2

Summary of snus test purchases made in 10 European Union Member States, between May and November 2010

Despite sales of snus being illegal in the EU, only two test purchases failed, one on http://www.buysnus.com and one on http://www.snusjet.com (which is no longer trading). In both instances, the purchasers' credit cards were rejected for unknown reasons (both test purchasers tried repeatedly with no success). Purchases were made from 18 unique websites in total (table 2).

The ordering process was reported as simple and easy to understand in all 43 instances. In 22 of 43 instances, purchaser's age was checked by asking for date of birth; in 19 instances, purchasers were asked to tick a box confirming legal age. At the Polish auction website (http://www.allegro.pl), age was indirectly verified by the auction being open to adults (over 18 years) only (‘normal account’ holders). It was reported that http://www.swedishsnus.com does not check age.

All 41 purchases, save the purchase from http://www.allegro.pl which was posted locally in Poland, were posted from Sweden (assessment based on shipment carrier and/or shipping label) and delivered within 3–11 days. No identification was required at point of delivery and, at least in the UK instances, delivery occurred without the recipient present. Three orders arrived with an unexpected gift: a free can of General snus and two complimentary cans of Choice (a nicotine and tobacco free snus) to the UK and Irish test purchasers respectively (both from http://www.northerner.com), and a free iPod case from http://www.buysnus.de to the German test purchaser.

Further analysis of the test purchases and the websites used

Target audience

Further analysis of the websites used in the test purchases suggests that vendors are targeting non-Swedish European audiences (table 3). All but one website was in English, with many offering a selection of other languages, notably German. In addition, over half of the websites (11 of 18) provide a customer location drop-down menu on the start page which allows for an EU location other than Sweden (table 3 and figure 1), and the Euro is the most common payment currency offered (despite not being used in Sweden) while payment in other EU currencies (the British Pound, Danish Krone and Estonian Kroon) is also offered.

Table 3

Further analysis of test purchase websites (N=18) to explore whether EU citizens (outside Sweden) are targeted

Figure 1

Screenshot http://www.buysnus.com (accessed 18 February 2011), highlighting the selection menu for purchaser's location, with one of the four choices being ‘within the European Union’.

Furthermore, we also note that three test purchases were made on German websites (http://www.snuskaufenonline.de, http://www.buysnus.de and http://www.snus.de) (table 2) and that the Italian test purchaser accessed an Italian front-page, http://www.snusitalia.it, which automatically redirected to Northerner's main English website (http://www.northerner.com). Furthermore, MaKe WeBo, which we identified as the second largest online vendor, explicitly claims that ‘http://www.buysnus.com makes it really easy and convenient for you to order the Swedish snus outside the borders of Sweden’ (http://www.buysnus.com, 18 May 2011).

Application of taxes

Twenty-six of 41 invoices were sufficiently specified to enable further analysis of the tobacco duties levied on the snus sales. We calculated that 22 of 26 sales applied Swedish smokeless tobacco tax of 336 SEK per kilogram.14 Calculations of four invoices were inconclusive. Thirty-one of 41 invoices specified VAT; calculations and vendor statements determined a 25% tax rate in all cases. Of the countries involved in the test purchases, only Sweden applied a 25% VAT rate in 2010; VAT in the 10 destination countries ranged from 17.5% in the UK to 23% in Greece. In addition, analysis of the websites indicates that the vendors do not always supply accurate information concerning the tax responsibilities of vendor and customer. Mysnus claims that “it is the responsibility of the buyer to pay for any applicable taxes and duty fees related to their purchase from http://snus.de” (http://www.snus.de, 18 May 2011). Likewise, MaKe WeBo argues that “Should there be any charge, taxes or duty in the country where the snus is being delivered, the receiver is responsible for these” (http://www.snusexpress.com, 18 May 2011).

Sales promotions

In addition to the free gifts and samples delivered with the test purchases, analysis of the purchase websites provides further evidence that marketing of snus is common and usually price based. We identified bulk-buy promotions (11 of 18 websites), direct price discounts (two of 18), competitions (four of 18), loyalty programmes (nine of 18) and referral schemes (three of 18), with many websites running numerous promotions. One vendor makes explicit the reasons for its referral scheme: “Snus is a tobacco product and therefore our promotion possibilities are limited. That's why we could use your help to tell others about us” (http://www.snus4all.com, 27 May 2011). Examples of the most common sales promotion technique, the bulk-buy promotion, include ‘Buy 8 cans get 10’ (http://www.northerner.com, 27 May 2011), ‘Buy 10, pay for 7’ (http://www.buysnus.com, 27 May 2011) or ‘Buy 8 cans of Northerner Citrus & Menthol (6 mg) for € 22.40 and get 2 free!’ (http://www.snuskaufenonline.de, 27 May 2011). Snus merchandise was also on offer (see figure 2).

Figure 2

Screenshot http://www.northerner.com (accessed on 22 March 2010), showing a selection of snus merchandise with printed messages on them ranging from fun texts to political messages.

Of the four websites running prize competitions, three competitions aimed at encouraging bulk buying. For instance, Northerner offers customers a chance to win a snus fridge by buying 10 Taboca snus cans plus 10 Montecristo snus cans (http://www.northerner.com, 7 April 2011). In another, on http://www.swedishsnus.com, the customer has to ‘like’ the vendor on Facebook, a social networking site, automatically alerting all the customer's Facebook network (‘friends’) to the vendor and its online store (figure 3).

Figure 3

Screenshot http://www.swedishsnus.com (accessed 18 March 2011) showing the vendor running a (social media) competition to promote its snus products.

Discussion

Our findings suggest that the online sale and promotion of snus documented in this study contravene three aspects of EU legislation—the TPD which bans sales of snus outside Sweden, Directive 2008/118/EC which requires that excise duties on distance sales are levied in the country of destination and the Tobacco Advertising Directive which bans online tobacco advertising. Although sale of snus has been prohibited in the EU since 1992, we found that snus is currently being sold on the single market via the internet and was easily purchased in all 10 EU Member States where test purchases were attempted. Importantly, our findings suggest that online vendors were deliberately targeting non-Swedish nationals and that most operate from Sweden, despite Swedish Ordinance 1994:1266 banning the export of snus to other EU Member States. Furthermore, our findings suggest that age verification methods are inadequate and that price-based promotions are widespread.

The main limitation of this study is that we were unable to conduct test purchases in all 27 EU Member States (bar Sweden—where sales are legal). Nevertheless, the fact that all but two purchases were successful, that these failures were unrelated to the sales websites but attributable to credit card problems and that the websites are generic and would operate in any Member State suggest that purchases could be made from anywhere in the EU.

Our finding that the vast majority of vendors selling snus online in the EU operate from Sweden suggests that Swedish Ordinance 1994:1266 is not being enforced. By contrast, the Swedish government is reportedly urging the EU to lift the ban on snus, viewing it as a violation of free trade principles rather than a public health issue,15 an argument first presented by Swedish Match over a decade ago.16 ,17 Furthermore, it is unclear how the excise duties from these sales are processed in Sweden, whether they are collected by the Swedish authorities or remain in the pockets of the online vendors. Although these taxes should, in theory at least, be paid in the country receiving the products, achieving this is difficult, given that other EU Member States (as far as we are aware) do not have a policy for taxing snus.

Our findings also document widespread use of price-based snus promotions. Given the dearth of evidence on the tobacco industry's use of price promotions outside the USA,18 this is an important finding and supports emerging evidence that price-based promotions are increasing in Europe.19 ,20 The EU Tobacco Advertising Directive bans tobacco advertising with cross-border implications and defines advertising as “any form of commercial communications with the aim or direct or indirect effect of promoting a tobacco product.” We would argue that this definition includes the promotions detailed in this study. In addition, such promotions contravene Article 13.4 (c) of WHO's Framework Convention on Tobacco Control which has been ratified by both the European Community and Sweden21 and which calls for the restriction of direct and indirect incentives that encourage the purchase of tobacco.22 Furthermore, the 2008 Guidelines for the Implementation of Framework Convention on Tobacco Control Article 13 state that internet sales of tobacco should be banned as they inherently involve tobacco advertising and promotion.23

This paper raises further questions about the internet as a vehicle to market and promote tobacco products, in particular to young people. Arguably merchandise with texts like ‘snus is the shit’ are targeted at, and will appeal most to, a younger audience. What's more, texts like “stop the EU ban on snus” suggest that vendors are attempting to involve customers in EU policy debates. Furthermore, vendors used inadequate age verification procedures, relying entirely on self-report, an important finding in the context of preventing under-aged sales of other tobacco products (eg, cigarettes) that are legally sold via the internet in the EU. In this respect, it is noteworthy that the conduct of the vendors selling snus online in the EU does not differ significantly from that of vendors selling cigarettes in the USA.24 ,25

Policy and research implications

Given Sweden's apparent failure to fulfil its responsibilities under EU law, it would seem appropriate for the European Commission (which is responsible for ensuring that EU law is correctly applied) to consider starting infringement proceedings and, if necessary, refer the case to the European Court of Justice. Furthermore, other interested parties could raise a complaint with the Swedish International Prosecutor. Resulting investigations could include examination of the conduct of these online vendors and, given the way in which Swedish Match's website links directly to the online vendors and indications that one of the websites may still be directly owned by Swedish Match, such an investigation should extend to the manufacturers who directly benefit from such sales. It should also examine the payment of taxes on these sales in order to determine the extent of mispayment.

The Swedish government could consider a licensing system as a means of addressing the issues raised, with the license being revoked if legislation is breached. Such a system would need to extend from the producers, through to the distributors. Tobacco sales licensing systems have been successfully introduced in several countries, including the USA, Singapore, Canada and Australia.26

The conduct of the vendors involved in selling snus and the difficulties of enforcing existing legislation need to be borne in mind by the Commission as it revises the TPD. This paper provides strong evidence that those selling and distributing snus (and requesting a reversal of the ban as part of the TPD revision) cannot be trusted to behave responsibly; consequently, their rhetoric on harm reduction and ‘responsibility’27 ,28 should be treated with caution. A specific clause prohibiting the sale of snus via the internet and a clear indication of the penalties those contravening legislation will face should be included in the revised text to remove any ambiguity. Furthermore, stricter age verification methods for online tobacco sales could help prevent underage online tobacco sales in Europe. Interventions currently used in the USA may be helpful. Voluntary agreements with the major credit card companies aimed to prevent the use of credit cards to buy cigarettes online, and similar agreements with private couriers to prevent their distribution has been shown to decrease traffic on websites selling cigarettes.29 Similarly, PayPal's policy currently prohibits transactions for tobacco products,30 though the authors found one snus vendor offering PayPal as a payment method (this website has since removed the PayPal method of payment, following a complaint from the authors to PayPal). In 2010, the USA also introduced more stringent age verification methods via the Prevent All Cigarette Trafficking Act (PACT Act) to reduce underage tobacco sales over the internet.31 This Act requires all online vendors to check US customers' age and address at time of purchase against third party databases and to ship the tobacco via a courier requiring an adult signature at point of delivery.

Finally, our findings highlight the need for careful monitoring and enforcement of existing legislation. With other avenues of tobacco advertising quickly diminishing, the internet is one of the last communication channels left to the industry where it can have a visible presence and very efficiently and effectively communicate with customers worldwide to promote and sell its products. Serious thought needs to be given as to how such monitoring is undertaken. In 2008, the WHO Conference of the Parties set up an expert group on cross-border advertising, promotion and sponsorship, mandated to keep the Conference of the Parties informed on developments in this area. Despite the establishment of this Expert Group, and this paper showing that monitoring can be easily done, without responsibility and funding for such work clearly allocated, this sort of monitoring is frequently overlooked. This and the lack of appropriate penalties will only encourage industry to contravene legislation.

Our preliminary findings of the industry's efforts to encourage users to promote products via social networking sites indicate the need for further research to examine how social networking sites and viral marketing techniques are used to promote and increase user acceptance of novel tobacco products.

What is already known on this subject

  • Existing EU legislation bans the sale of snus outside Sweden, requires taxes on products sold between Member States via the internet to be paid in the country of receipt and bans online tobacco advertising. The EU Tobacco Products Directive that bans the sales of snus (as well as establishing rules on tobacco product labelling and ingredients) is currently under review. Major tobacco companies and the Swedish government have indicated publicly that they support the ban on snus sales being overturned.

What this paper adds

This is the first study that demonstrates that:

  • Snus is being sold on the single market via the internet in contravention of the existing EU Tobacco Products Directive.

  • Taxes levied on these sales contravene EU tax and customs legislation.

  • Most of the online retailers operate from Swedish Territory and make extensive use of the internet to promote sales of snus contravening the EU Tobacco Advertising Directive.

In short, in their efforts to sell and promote snus, certain segments of the tobacco industry appear to be willing to contravene three pieces of EU legislation. As such, the credibility and integrity of these parties as stakeholders in consultations on future policy developments must seriously be questioned. The findings further highlight how national and regional tobacco control legislation can be undermined in an increasingly globalised world.

Acknowledgments

The authors are indebted to the test purchasers who generously donated their time and effort to carry out test purchases on our behalf.

References

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Footnotes

  • Funding This work is supported by the ‘Pricing Policies and Control of Tobacco in Europe (PPACTE)’ project and funded by the EC FP7 Grant Agreement HEALTH-F2-2009-223323. AG is supported by a Health Foundation Clinician Scientist Fellowship. The snus was not purchased using money from either of these grants. AG is a member of the UK Centre for Tobacco Control Studies (UKCTCS), a UK Centre for Public Health Excellence. Funding to UKCTCS from the British Heart Foundation, Cancer Research UK, the Economic and Social Research Council, the Medical Research Council and the National Institute of Health Research, under the auspices of the UK Clinical Research Collaboration, is gratefully acknowledged. The funders played no role in the study design, analysis and interpretation of data nor writing of the report or the decision to submit the article for publication.

  • Competing interests None.

  • Ethics approval The project was approved by the University of Bath's Research Ethics Approval Committee for Health.

  • Provenance and peer review Not commissioned; externally peer reviewed.

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