The influence of global tobacco companies on Ukraine: NAPC included Philip Morris International and Japan Tobacco International in the list of international sponsors of the war
The National Agency for the Prevention of Corruption (NACP) said it had added two leading tobacco companies to its list of international war sponsors: Philip Morris International and Japan Tobacco International. These organizations continue their activities in Russia and contribute to the economy of the aggressor country by paying large amounts of taxes to its budget.
Philip Morris International is an American global company engaged in the production of cigarettes and tobacco products, selling its products in more than 180 countries. Among the well-known brands: Marlboro, Parliament, Bond, Chesterfield, L&M, Next, HEETS (tobacco sticks for IQOS - tobacco heating systems). In Russia, Philip Morris International is represented through two affiliated companies: the plants of Philip Morris Izhora JSC in the Leningrad region and the branch of Philip Morris Izhora Kuban JSC in Krasnodar, as well as Philip Morris Sales and Marketing LLC with representative offices in about 100 cities of the country .
In 2019, the market share of Philip Morris International trademarks in Russia was 30.1%. Thus, the company has made a significant contribution to the Russian budget thanks to the taxes paid, which are allocated to the needs of the army and other purposes.
Currently, Philip Morris International's investment in Russia exceeds $2 billion. With confidence in Russia's economic potential, the company is implementing a broad, long-term investment program. In particular, since 2017, more than 14 billion rubles have been invested in localizing the production of tobacco products for IQOS at a plant in the Leningrad region. The total investment in this plant, opened in the early 2000s, exceeds US$1.1 billion.
According to financial data from the Russian division of Philip Morris, the company's sales in the first year of the full-scale conflict between Russia and Ukraine increased by 8% to 140.3 billion rubles, and net profit to 48.2 billion rubles, which is 45% higher than in 2021 . Accordingly, a significant amount of taxes was paid to the Russian budget, namely more than 136 million US dollars.
It is worth noting that at the beginning of the conflict, Philip Morris announced its intention to sell its business in Russia in order to preserve its reputation. However, all “attempts” to sell the Russian business seem to have been unsuccessful, and the company continues to remain one of the largest taxpayers to the Russian budget.
The second member of the list, Japan Tobacco International (JTI), is the undisputed leader of the Russian tobacco market with a market share of approximately 34.9%. The company is also one of the largest consumer goods companies in Russia in terms of sales. The company's portfolio on the Russian market includes such international brands as Winston, LD, Mevius, Camel, Sobranie, as well as Russian brands “Donskiy Tabak”, Kiss, Play, “Peter I”, “Troika” and others.
JTI is one of the leading manufacturers of reduced-risk products (Ploom tobacco sticks and Logic Compact capsule-type electronic vaporizers). The company is the largest investor and taxpayer in the Russian tobacco industry. Over the past twenty years, JTI's investments in the Russian economy have exceeded $4.6 billion. In 2020, the company's tax contributions to the Russian federal budget amounted to 1.4% of total income. The company itself stated that the Russian market in 2022 provided it with about 2 billion US dollars or about 11% of consolidated income for this period.
Although JTI representatives reported a halt to new investments and marketing activities in Russia, the company continues to produce and distribute its products in the Russian market.
