Putin seizes Russian operations of cigarette giant Japan Tobacco International
Russian President Vladimir Putin placed Japan Tobacco International's Russian operations under state control on Thursday, ordering their transfer to a state-linked holding company.
The order covers JTI's factories in St Petersburg, Rostov-on-Don, the Lipetsk region and the Leningrad region. The company, whose headquarters are in Geneva, entered the Russian market in 1999 and acquired local producer Donskoi Tabak in 2018.
Market position
JTI employs around 4,000 people in Russia and holds roughly 40% of the Russian cigarette market, making it the country's largest manufacturer. Its Russian product range includes international brands Winston, Glamour, Camel, LD and Sobranie, and domestic labels Pyotr I, Russky Stil and Donskoi Tabak.
JT Group has invested $4.6bn in its Russian operations over more than 20 years
Political context
The seizure follows Russia's arrest last month of Yuki Imai, a journalist with the Japanese newspaper Hokkaido Shimbun, on espionage charges. Japan has rejected Russia's accusation that Tokyo systematically uses journalists for intelligence gathering.
Japan has joined Western sanctions over Russia's invasion of Ukraine, despite a long-standing territorial dispute over the Chishima Islands. JTI joins a list of European companies whose Russian assets have been transferred to state management, including Nestlé, Auchan, Leroy Merlin, and Metro.
Putin has presented the external management process as a response to sanctions, which include caps on dividend payments and substantial fees on asset sales. He suggested returning control to former owners if 'conditions improved'.
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