Ten Percent of the Group’s Revenue: Putin Puts Japan Tobacco’s Russian Factories Under Temporary Managers

On Thursday, 5 November, Russian President Vladimir Putin signed a decree placing four of Japan Tobacco’s manufacturing companies in Russia under temporary administration. The JT Group confirmed the move the next day. According to official Russian reporting, the stakes in Donskoy Tabak, Pereslavl-Tabak, JTI Yelets and Kres Neva were transferred to the Russian company Industrial Assets.

A further decree published on Friday put all shares held by JTI Investments Sarl in three companies — Pereslavl-Tobacco, JTI Innovative Products and JTI Russia — under temporary management as well.

Japan Tobacco International, the overseas arm of the Tokyo-listed group, is Russia’s biggest tobacco manufacturer and has operated there since 1999. Its brands in the country include Winston, Camel, MEVIUS and LD. The Japanese government owns around 37 percent of the parent company. The Russian business accounts for about 10 percent of JT Group revenue and roughly 25 percent of its operating profit.

Finance Minister Satsuki Katayama said on Friday that Tokyo had already protested through diplomatic channels and asked for the measure to be withdrawn. In a statement dated 6 November, the JT Group said it was gathering information, considering its options and assessing the impact, while stressing that it had continued to operate in Russia in compliance with applicable regulations and sanctions.

The Kremlin has used a presidential order from April 2023 that lets it place assets belonging to people and companies from countries it calls “unfriendly” under Russian control. Relations have deteriorated further this year: Putin visited a Russian-held, Japanese-claimed island in August, a Japanese journalist was detained in the Far East in October on suspicion of espionage, and Moscow warned of a harsh response after a Japanese company sold drones to Ukraine. Many Japanese firms left Russia after 2022; Japan Tobacco stayed. That choice has now been overtaken by a pair of decrees.