- A decree dated November 5, 2026 hands Japan Tobacco International’s (JTI) four Russian factories to a Russian company, Promyshlennye Aktivy.
- It is the first time Moscow has applied its “temporary management” mechanism to a tobacco company.
- Imperial Brands (2022) and BAT (2023) sold their Russian businesses after the invasion of Ukraine. JTI and Philip Morris stayed.
- Danone, Carlsberg, Nestlé and Auchan have met the same fate. Danone and Carlsberg eventually sold their subsidiaries at a steep discount.
Four factories under Russian control
Decree No. 817, signed on November 5, adds JTI’s stakes in four Russian companies to the list of assets under temporary management: Petro and JTI Donskoy Tabak, which make cigarettes in St. Petersburg and Rostov-on-Don, and JTI Yelets and Kres Neva, which process raw tobacco. The sites employ around 4,000 people. The largest, Petro, posted a record net profit of 13.2 billion rubles in 2023.
The decree gives no reason for the move. Nor does it say who the new manager is. Several Russian companies go by the name Promyshlennye Aktivy (which simply means “industrial assets”), and the decree provides no identifier showing which one is taking charge. According to independent Russian media, one of them may be linked to Taimuraz Bolloev, a long-time associate of Vladimir Putin. The name is a familiar one: Bolloev is the man Moscow installed at the head of the Baltika brewery after it seized Carlsberg’s business in 2023.
On paper, JTI remains the owner. The Kremlin insists these decrees are not aimed at changing ownership. But temporary management has no end date, and it is the managers appointed by Moscow who call the shots.
The markets reacted immediately. On November 6, Japan Tobacco shares fell 19.3% in Tokyo, their worst session on record.
Imperial and BAT left, PMI and JTI stayed
In the aftermath of the invasion of Ukraine, all four major tobacco companies scaled back in Russia, but only two actually left.
In April 2022, Imperial Brands transferred its Russian business to local investors, including its Volgograd factory, and wrote off £225 million. Russia accounted for only a small share of its revenue.
British American Tobacco announced its withdrawal as early as March 2022, but it took 18 months to complete. In September 2023, the group finally sold its Russian and Belarusian businesses to a consortium led by local management, renamed ITMS Group, for an undisclosed sum. BAT held nearly a quarter of the Russian market at the time.
JTI, for its part, merely suspended investment and marketing in Russia in March 2022, and dropped the planned launch of its latest heated tobacco product there. Production and sales, however, carried on. Present in the country since 1999, the group says it has been the Russian market leader by volume since 2007, with a market share of around 35%.
Philip Morris International also announced plans to leave Russia in March 2022, but four and a half years later, it is still there. The group had talked about restructuring its Russian business, but nothing has come of it since.
In August 2023, Ukraine’s National Agency on Corruption Prevention added JTI and PMI to its list of “international sponsors of war”, pointing to the weight of their taxes in the Russian budget. We had already detailed the billions paid to the Russian treasury by tobacco companies since the start of the war.
Leaving keeps getting more expensive
For companies that chose to wait, things do not seem to be improving. Since 2022, any sale of assets by a company from an “unfriendly” country has required approval from a Russian government commission. In October 2024, Moscow tightened the rules further: the minimum discount granted to the buyer rose from 50% to 60%, and the “voluntary contribution” to the Russian budget from 15% to 35% of the company’s value. Deals worth more than 50 billion rubles also require Vladimir Putin’s personal approval. Law firm Linklaters has done the math: on these terms, a foreign investor recovers no more than 5% of the value of its Russian assets.
Danone, Carlsberg, Nestlé: the same story
The temporary management mechanism was created by a decree of April 25, 2023, presented by Moscow as a response to seizures of Russian assets abroad.
Danone and Carlsberg fell victim to it on July 16, 2023, even though both were trying to sell. Carlsberg had announced the sale of its subsidiary in June, a deal promptly blocked by the decree. Taimuraz Bolloev was appointed president of Baltika without the Danish brewer’s consent, and was later hit by EU sanctions in June 2024. In December 2024, Carlsberg finally sold Baltika to two of its executives for about $320 million. At the end of 2022, it had valued its Russian net assets at more than $1 billion.
At Danone, a nephew of Chechen leader Ramzan Kadyrov, Yakub Zakriev, took over the subsidiary. The French group eventually sold it in 2024, for 17.7 billion rubles according to the Financial Times, booking a loss of €1.2 billion. And this autumn, the wave has gathered pace.
On September 17, 2026, sixteen Russian companies belonging to Nestlé, Auchan, FM Logistic and Lemana Pro (formerly Leroy Merlin) were handed to a single entity, L.E.V. Management. Metro followed, then in October flooring maker Tarkett, hygiene products specialist Ontex and three packaging groups. All of these companies had chosen to stay.
A taste of revenge against Tokyo
Japan has all the more reason to worry because it is directly involved. Through its Ministry of Finance, the Japanese state owns 37.55% of Japan Tobacco. The law requires it to hold at least a third of the capital of a company deemed essential to its tax revenue. Since 2022, Tokyo has applied G7 sanctions against Moscow while indirectly collecting its tobacco company’s Russian profits. A situation that, in Moscow’s eyes, seems to have gone on long enough.
In any case, the decision comes amid deteriorating relations between the two countries. In August, Vladimir Putin visited Iturup, one of the Kuril Islands claimed by Tokyo. In mid-October, a Japanese journalist was arrested on Sakhalin on suspicion of espionage. That same month, Moscow called the sale of a drone to Ukraine by a Japanese company a “hostile act” and promised a harsh response.
For now, Japan Tobacco says it is assessing the situation and its options, with its employees a priority. In Moscow, former president Dmitry Medvedev commented on the share price plunge in an English-language post on X.
The lesson applies to the whole industry. PMI, the last of the four tobacco majors still in control of its Russian factories, now knows what to expect. Staying in Russia means accepting that a decree can decide, overnight, what is left of your business.
