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Key Points
First for Tobacco Majors: Russia has placed stakes in four Japan Tobacco International (JTI) businesses under temporary management, the first such move involving a major international tobacco manufacturer, according to Interfax.
Management, Not Ownership Transfer: The temporary manager can exercise ownership rights over the designated assets but cannot dispose of them. Legal ownership has not formally changed.
JTI's Russian Market Position: JTI held an average 35.8% share of Russia's total tobacco market by volume in the first nine months of 2026, with sales of 59.9 billion units.
Diverging Corporate Strategies: British American Tobacco and Imperial Brands exited Russia, while Philip Morris International continued operating, holding approximately $5.6 billion in Russian assets as of September 2026.
Future Market Outlook: As Russia's tobacco market changes and diplomatic efforts continue, whether international tobacco companies that exited could eventually return remains an open question.
2Firsts
November 6, 2026
Russian President Vladimir Putin signed a decree on November 5 placing stakes in four Russian businesses linked to Japan Tobacco International (JTI) under temporary management by a local company. According to Russian news agency Interfax, it is the first time Russia has applied the measure to a major international tobacco manufacturer.
The decision covers two cigarette factories and two tobacco-processing facilities belonging to JTI, the international tobacco business of Japan Tobacco Inc. (JT), one of the world's largest tobacco companies.
Four JTI businesses placed under temporary management
Under Presidential Decree No. 817, signed on November 5, the Russian joint-stock company Promyshlennye Aktivy (Industrial Assets) was appointed temporary manager of the equity interests in four JTI-related companies: Petro, JTI Donskoy Tabak, JTI Yelets and Kres Neva.
Petro in St. Petersburg and JTI Donskoy Tabak in Rostov-on-Don manufacture finished tobacco products, while JTI Yelets in the Lipetsk region and Kres Neva in the Leningrad region process tobacco materials.
The decree covers 100% of the equity interests in each company, held through various JTI-related entities. It was issued under Russia's 2023 temporary asset management framework, which allows designated managers to exercise the rights of asset owners, except the right to dispose of the assets.
The decree did not specify a reason for the decision. Russia has previously placed assets belonging to foreign companies in other industries under the same mechanism.
JTI told Interfax on November 5 that it was reviewing the decree and considering possible actions, with priority given to its employees and business partners.
JT, JTI's Tokyo-listed parent company, also has a significant government shareholder. According to JT's corporate disclosures, the Japanese government held 33.34% of its issued shares as of December 31, 2025. Japanese law requires the government to maintain a stake exceeding one-third.
Russian Presidential Decree No. 817, dated November 5, 2026. The left image shows the decree's first page, while the right shows provisions concerning shareholdings in JTI Donskoy Tabak and JTI Yelets and their temporary management arrangements.
Source: Russia's Official Internet Portal of Legal Information (original publication).
Note: Due to network access restrictions, 2Firsts could not access the official website directly. The images were extracted from a copy of the Russian-language PDF with AI assistance and combined for presentation. Readers are encouraged to verify the document through the original government website.
Russia has long been one of JTI's largest markets
JTI has operated in Russia since 1999 and expanded its presence through the acquisition of Russian tobacco producer Donskoy Tabak in 2018.
The company describes itself as Russia's largest tobacco manufacturer by sales volume. According to JT's financial results released on October 29, its share of Russia's total tobacco market by volume averaged 35.8% during the first nine months of 2026. Sales volume reached 59.9 billion units over the period, down 3.6% from a year earlier.
JTI's Russian operations employ approximately 4,000 people across its offices and four production facilities. Its portfolio includes international brands such as Winston, Camel, LD, Sobranie and Mevius, alongside Russian brands.
Russia has also contributed substantially to JT's earnings. In a May 2024 interview with the Financial Times, then-JT Chief Executive Masamichi Terabatake said the Russian business accounted for roughly 20% of the group's profits in 2023.
Following Russia's invasion of Ukraine in February 2022, JTI suspended new investments and marketing activities, including the planned Russian launch of its Ploom X heated tobacco device. The company continued operating in the market and restructured its supply chain to comply with international sanctions.
According to its third-quarter 2026 financial disclosures, JT was continuing to evaluate options for its Russian business, including a potential transfer of ownership.
BAT and Imperial Brands exited Russia, while PMI continued operating
International tobacco companies have taken different approaches to Russia since 2022.
Imperial Brands suspended its Russian operations in March 2022 before transferring its local business, including a manufacturing facility in Volgograd, to Russia-based investors. According to its 2022 financial results, the transaction was completed on April 27 of that year.
British American Tobacco (BAT) announced plans to transfer its Russian business in March 2022. It completed the sale of its Russian and Belarusian operations in September 2023 to a consortium led by members of its Russian management team. The businesses subsequently operated under the ITMS Group name.
Philip Morris International (PMI) announced its intention to exit Russia in March 2022, suspending planned investments and reducing some manufacturing activities. However, the company has continued operating in the country.
According to PMI's third-quarter 2026 filing with the U.S. Securities and Exchange Commission, its Russian operations held approximately $5.6 billion in total assets as of September 30, excluding intercompany balances. Russia accounted for around 7% of PMI's total net revenues during the first nine months of 2026.
PMI said that any sale of its Russian operations would face complex regulatory requirements and restrictions arising from international regulations.
Russia's changing tobacco market and the question of a return
Before 2022, Russia was one of the world's largest cigarette markets and a major competitive arena for international tobacco companies. According to Euromonitor figures cited by Morningstar, Russia was the world's fourth-largest cigarette market in 2020, with sales of nearly 206 billion cigarettes.
The market has changed considerably since 2022. International tobacco companies have transferred businesses to local investors and management teams, changing the ownership of established manufacturing operations. Domestic companies have taken over businesses previously controlled by foreign tobacco groups.
Electronic cigarettes and other alternative nicotine products have also attracted more users. According to data from Russian consultancy FinExpertiza reported by TASS, the number of consumers using electronic smoking products, including e-cigarettes and heated tobacco systems, rose 19% in 2024 to approximately 5.3 million.
Diplomatic efforts to end the war in Ukraine continue. According to a November 3 Reuters report, the Kremlin confirmed that Russia, Ukraine and the United States were scheduled to hold peace talks in Abu Dhabi on November 10–11.
For an industry that spent decades competing in Russia, the prospect of an eventual peace agreement raises a longer-term question: could international tobacco companies that sold their Russian businesses eventually return to the market?
2Firsts will continue to follow developments in Russia's tobacco and nicotine markets and the activities of international tobacco companies.
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