Russian President Vladimir Putin has put Japan Tobacco International (JTI) under state control, according to a decree issued on Thursday. The decree transfers JTI's four factories and about 4,000 employees to a state-linked holding company, AO Promyshlennye Aktivy. JTI holds around 40% of the Russian cigarette market, making it the largest manufacturer in the country. The company produces several brands, including Winston, Camel, and local labels like Pyotr I and Russky Stil.
Key Details
This move follows a series of asset seizures of Western companies in Russia. These include Swiss food giant Nestlé and French retailers Auchan and Leroy Merlin. JTI has operated in Russia since 1999 and invested $4.6 billion in its Russian operations. The company halted new investments after the Ukraine conflict began. The seizure also comes amid rising tensions between Russia and Japan. This is particularly true after the arrest of a Japanese journalist on espionage charges, which Japan has denied.
Background
Putin's government has indicated that it might nationalize Western assets in response to sanctions. He has criticized the seizure of Russian assets abroad. He suggested that external administration could serve as a countermeasure. The Russian president stated, "External administration also created the opportunity to respond 'in kind' to the seizure of Russian corporate assets in the West."
This development may affect the tobacco sector, especially companies with significant exposure to the Russian market. Investors in JTI and similar firms may see more volatility due to the uncertainty surrounding asset control and international relations. Watch for further developments regarding Western companies' operations in Russia. Pay attention to any announcements from JTI about its future strategy in the country.
Based on reporting by: euronews.com, swissinfo.ch