Swedish Match takes legal action against US Tobacco

Swedish Match today announced that its fully owned subsidiary Swedish Match North America, Inc. ("SMNA") has filed federal civil antitrust action in the United States District Court for the Western District of Kentucky against U.S. Smokeless Tobacco Company ("USST") and other U.S. Tobacco affiliated companies, seeking a permanent injunction and alleging substantial antitrust damages resulting from USST’s use of illegal, exclusionary tactics to suppress competition, raise prices, and stifle innovation in the United States moist snuff tobacco market.

SMNA’s suit comes just 2 months after the United States Court of Appeals for the Sixth Circuit upheld a jury verdict awarding $350 million in damages against USST in an earlier suit brought by Conwood Company, L.P., another competitor in the moist snuff market. Under federal antitrust law, these damages are trebled to $1.05 billion.

SMNA’s complaint alleges that it suffered damages as a result of USST’s conduct, which has continued through the period covered by the SMNA complaint. According to testimony by SMNA executives in the Conwood litigation, USST employed the same tactics it used against Conwood to injure SMNA. The SMNA complaint also alleges that USST targeted the "value priced" Timber Wolf product manufactured by SMNA to the detriment of competition and consumers.

Despite the existence of a federal court order enjoining certain conduct by USST SMNA believes that continuing activities of USST left SMNA no recourse but to institute its own antitrust action in order to protect competition in the marketplace in which it operates and to vindicate its legal rights.

SMNA is represented by the law firms of Debevoise & Plimpton of New York, New York and Robertson, Freilich, Bruno and Cohen of Newark, New Jersey.

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