The Russian president signed a presidential decree placing JT International’s Russian business under provisional administration. JT’s Russian business accounts for approximately 10% of sales and remains the market leader domestically.
Russian President Vladimir Putin signed a presidential decree on the 5th placing the Russian business of JTI, the overseas subsidiary overseeing Japan Tobacco Inc. (JT)’s global tobacco business, under the provisional administration of a Russian company. As a result, the business is expected to change from direct oversight by JTI to a Russian-led management structure.
According to JTI, approximately 4,000 people work at its offices and factories in Russia, which has 4 production sites, including locations in the northwestern Leningrad Region and Lipetsk Region south of Moscow. JTI began its Russian business in 1999 and became the domestic market leader in 2007.
JT commented that it is carefully reviewing the options available to it, with employees and other stakeholders as its top priority. JT has continued operating in Russia as Japanese companies have increasingly withdrawn since Russia’s invasion of Ukraine.
Against the backdrop of heightened tensions in sanctions and economic relations between Russia and Japan, the move is seen as an attempt by Russia to put pressure on the activities of Japanese companies.