Marlboro maker Philip Morris International Inc is working on options to exit the Russian market, citing a complex and rapidly changing regulatory and operating environment in the country following its invasion of Ukraine.
The company, which garnered around 6% its net revenue from Russia in 2021, said on Thursday it has discontinued sale of several cigarette products and canceled all product launches for the year in Russia.
It has also canceled plans to make over 20 billion TEREA sticks, heated tobacco units intended for use with its IQOS ILUMA devices, as well as related investment of $150 million.
Suspension Of Planned Investments
Earlier this month, Philip Morris had suspended its planned investments and decided to scale down manufacturing operations in the country.
Rival Imperial Brands too has started talks to transfer its Russian business to a local third party, joining BAT in exiting the sanction-hit country.
British American Tobacco Plc is in advanced talks to transfer its Russian business to Russia's SNS Group of Companies, its distributor, SNS said last week, after Moscow suggested it could nationalise assets of foreign firms that left the country.
BAT, which makes Pall Mall and Rothman's cigarettes, controls just under 25% of the Russian tobacco market.
"The process of transferring the management of BAT business in Russia to SNS GC is well under way at remarkable speed," an SNS spokesperson told Reuters, adding that the handover details were being negotiated.
On Wednesday, Nestlé said it will halt several non-essential brands including KitKat chocolate and Nesquik in Russia, in an unprecedented move amid pressure on the world's top consumer goods company after criticism from Ukrainian President Volodymyr Zelenskiy.