Putin extends Russian control over Japan Tobacco businesses

Russian President Vladimir Putin has placed three more local companies belonging to Japan Tobacco International (JTI) under temporary management by a Russian firm, extending a measure that had already covered four of the group’s Russian businesses.

The new order, dated 6 November and published overnight, names J.T.I. Russia, Pereslavl-Tobacco and J.T.I. Innovative Products. Interfax reported that the companies handle importing, management and holding functions. All three are owned by JTI Investments Sarl.

The firm appointed to manage the businesses is Industrial Assets, the same company named in an order on 5 November covering stakes in four other JTI entities, including Donskoy Tabak and Petro. Reuters reported that the earlier order covered production assets, including cigarette factories and tobacco-processing facilities.

JTI, part of Japan Tobacco Inc., has operated in Russia since 1999. Its brands include Camel and Winston, and the Russian business accounts for about 10% of the group’s revenue and roughly a quarter of its operating profit, according to Reuters.

JTI said after the first order that it was assessing the situation and its options, with employees among its priorities. Russian media quoted the head of Industrial Assets as saying the company would seek to maintain production, retain existing teams and meet obligations to employees and business partners.

The decrees do not state a reason for the transfer. Interfax noted that they do not identify which Russian company registered under the name Industrial Assets will manage JTI’s local business. Japan’s foreign ministry protested the initial transfer to Russia, according to Interfax.