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Ukraine adds 2 tobacco companies to list of war sponsors

by Uliana Horoshko August 25, 2023 3:38 AM 2 min read
Ukrainian mortar crew member Jamal smokes a cigarette on a rainy evening near the front line in southeastern Ukraine on May 23, 2023. (Francis Farrell/The Kyiv Independent)
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Ukraine's National Corruption Prevention Agency added the world's leading tobacco companies Japan Tobacco International (JTI) and Philip Morris International to the list of international sponsors of war.

According to the agency's website, the companies continue to do business in Russia and support its economy.

In particular, Japan Tobacco International is the undisputed leader of the tobacco market in Russia with a market share of almost 35%. The company is represented on the Russian market, in particular, by the Winston, LD, Mevius, Camel, and Sobranie brands.

"Over the past 20 years, JTI's investments in the Russian economy have exceeded $4.6 billion. In 2020, the company's tax payments accounted for 1.4% of the Russian federal budget revenue. The company itself has openly stated that the Russian market generated about $2 billion in 2022 for the JT Group, or approximately 11% of its consolidated revenue in 2022," the statement said.

Ukraine's National Corruption Prevention Agency added that although JTI representatives stated that JT Group had suspended new investments and marketing activities in Russia, the company still continues to manufacture and distribute products in Russia.

Philip Morris International's market share in Russia amounted to 30.1% in 2019. Thus, the company is one of the largest taxpayers to the Russian budget, which then supports the Russian army.

Philip Morris International manufactures Marlboro, Parliament, Bond, Chesterfield, L&M, Next, and HEETS products. Currently, Philip Morris International's total investment in Russia exceeds $2 billion.

According to the financial statements of Philip Morris' Russian subsidiary, the company's net profit in the first year of Russia's full-scale invasion of Ukraine increased by 45% compared to 2021. Accordingly, more than $136 million in income tax was paid to the Russian budget.

Ukraine's National Corruption Prevention Agency writes that at the beginning of the war, Philip Morris announced its intention to sell its Russian business, but allegedly all attempts were unsuccessful, so the corporation still remains one of the largest taxpayers to the Russian budget.

As previously reported on Aug. 17, Ukraine also added China's Alibaba Group Holding Limited, the owner of the AliExpress online store, to the list of international sponsors of the war.

Earlier, the Bermuda-based alcohol company Bacardi Limited and sweets manufacturer Mondelez International were included in the list.

According to the agency, the list is "a powerful reputational tool" aimed at encouraging the exit of international business from Russia, reducing the country's "financial and technological ability to kill Ukrainians."

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