Japan Tobacco explained the decision to maintain the Russian business

As Terabatake told the Financial Times, the manufacturer of tobacco products (brands Winston, LD, Camel, Sobranie, Donskoy Tabak, Kiss, Peter I and others) sent part of its supplies through Turkey and transferred key personnel to Hong Kong.

With the start of the special operation in Ukraine, Japan Tobacco, 33% of which belongs to the State, did not rule out the sale of its business in the Russian Federation. However, in the end, the company decided to maintain the business by suspending all investment and marketing activities in Russia.

According to the director of the tobacco manufacturer, the Russian market accounts for about 20% of the company’s total profit. It was about $3 billion in 2023. Investors were worried about a possible decline in profits and Japan Tobacco would be violating its fiduciary obligations by leaving Russia, Terabatake explained.

“In the worst case, there is even the risk of being sued by shareholders if we stop doing business that we can continue,” said the CEO of the Japanese company.

Japan Tobacco is one of the largest foreign companies that has retained its business in Russia. It has more than 4 thousand employees and four factories in the country.

In November 2023, Japan Tobacco’s Director of Corporate Relations and Communications, Sergei Glushkov, already explained why the tobacco manufacturer decided to maintain the Russian business. The top manager then said that the company did not want to deprive Russian consumers of “a product to which they are accustomed.”