At a Glance:
- Concerning the complex trading environment, Marlboro is looking for options to exit the Russian market.
- The company has also canceled over 20 billion TEREA sticks and $150 million investments.
- The UK-listed tobacco firm Imperial Brands Plc has suspended all operations in Russia.
After the Russian invasion of Ukraine, the market has become complex with the rapidly changing regulatory and operating environment in the country. Concerning the complex trading environment Philip Morris International maker of Marlboro is working on options to exit the Russian market.
Philip Morris is responsible for around 6% of the net revenue from Russia in 2021. However, the company has planned to discontinue the sale of several cigarette products and has canceled all product launches for the year in Russia.
The company has also canceled over 20 billion TEREA sticks, heated tobacco units intended to use with its IQOS ILUMA devices, along with a related investment of $150 million.
Marlboro suspends operations
Philip Morris also recently suspended its plans of investments and decided to scale down manufacturing operations in the country. The company had plans to invest in new product launches as well as commercial, innovation, and manufacturing investments.
By far, big companies like McDonald‘s have temporarily suspended their operations in the country. Although Mcdonald’s continues to pay salaries to the employees across Russia and Ukraine.
Philip Morris suspended its operations in Ukraine on Feb 25, it accounted for around 2% of the total revenue in 2021. The company has one factory in Ukraine that employed 1,300 workers and had over 3,200 employees in Russia.
Several other companies join Philip Morris
Apart from Philip Morris, the UK-listed tobacco firm Imperial Brands Plc has suspended all operations in Russia. Alongside, Rival Imperial Brands has also started talks to transfer its Russian business to a local third party, joining BAT in exiting the Russian market.
