Tobacco Companies Suspend Investments And Operations In Russia

By Donna Ahern
Tobacco Companies Suspend Investments And Operations In Russia

Philip Morris International Inc has suspended its planned investments in the Russian Federation, the cigarette maker said on Wednesday, and will scale down manufacturing operations in the country following Moscow's invasion of Ukraine.

The previously planned investments include new product launches as well as commercial, innovation and manufacturing investments.

The company, like many Western brands including McDonald's Corp, is continuing to pay salaries to all its employees in Russia and Ukraine during this period.

Ukraine, where Philip Morris temporarily suspended its operations on 25 February, accounted for less than 2% of its total net revenue in 2021, while Russia made up around 6%.

The company has one factory and nearly 1,300 employees in Ukraine and more than 3,200 workers in Russia.


Imperial Brands 

Imperial Brands Plc has suspended all operations in Russia, following international sanctions against the country in response to Moscow's invasion of Ukraine, the maker of Winston cigarettes and Backwoods cigars said on Wednesday.

The London-listed company said it was halting production at its factory in Volgograd and all sales and marketing activities in the country.

"This decision comes amid a highly challenging environment in Russia as a result of international sanctions and consequential severe disruption," Imperial Brands noted.

The British company, which has already suspended its operations in Ukraine, also said it will be supporting its Russian employees, who continue to be paid while operations are paused.


Russia and Ukraine together represented about 2% of the group's net revenue and 0.5% of adjusted operating profit in full year 2021.

British American Tobacco 

Cigarette maker British American Tobacco Plc noted on Wednesday its business in Russia continued to operate, but that it had suspended all planned capital investment in the country in the wake of its invasion of Ukraine.

The company, which has 2,500 workers in Russia, also added it was "scaling our business activities appropriate to the current situation, including rationalising our marketing activities."

News by Reuters, edited by Donna Ahern, Checkout. For more A-brand stories, click here. Click subscribe to sign up for the Checkout print edition.

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