Putin seizes Russian operations of cigarette giant Japan Tobacco International
The decree transferred JTI’s four factories, around 4,000 employees and roughly 40% of the Russian cigarette market to a state-linked holding company. The latest seizure added to a list that includes Nestlé, Auchan, Leroy Merlin and Metro.
Russian President Vladimir Putin transferred Japan Tobacco International's (JTI) operations in Russia to state control on Thursday, issuing a decree to move the company under the supervision of a state-linked holding company AO Promyshlennye aktivy. The seized factories, located in St Petersburg, Rostov-on-Don, the Lipetsk region, and the Leningrad region, employ around 4,000 people and account for approximately 40% of the Russian cigarette market.
JTI, headquartered in Geneva, entered the Russian market in 1999 and acquired the local producer Donskoi Tabak in 2018. The company invested $4.6bn in its Russian operations over two decades, as per a company profile updated in November 2025.
Following Russia's full-scale invasion of Ukraine in 2022, JTI halted new investment in Russian production and marketing. The seizure of JTI comes after the arrest of Yuki Imai, a Japanese journalist from Hokkaido Shimbun, on espionage charges last month. Russia accuses Japan of systematically using journalists for intelligence gathering within the country, a claim Japan rejects. The move follows Japan's participation in some Western sanctions against Russia due to the ongoing war in Ukraine.
JTI's transfer to state management joins a list of European companies whose Russian assets have been placed under state control under the same mechanism, including Nestlé, Auchan, Leroy Merlin, and Metro. Russia presents this process as a response to sanctions imposed after the 2022 invasion, citing caps on dividend payments and substantial fees on sales of Russian business assets as restrictions.
Putin stated on October 1st that this mechanism also enables Russia to prepare retaliatory measures against potential future nationalizations of Russian assets abroad, while allowing the possibility of returning control to former owners if conditions improve. External management involves appointing state-linked administrators to run a company's Russian assets without the foreign owner's consent or compensation, effectively transferring control to the Russian state regardless of nominal ownership.
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