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Innovation and startups: the war in Ukraine: PMI wants to leave the Russian market

The world’s largest tobacco company Philip Morris International (PMI) wants to withdraw from the Russian market due to Russia’s invasion of Ukraine. The multinational has already stopped marketing many of its brands in the country, where it generates about 6% of its business.

While the war in Ukraine has been going on for more than a month, a group of Western multinationals has announced a complete shutdown of their activities in Russia. Tobacco manufacturer Philip Morris International is joining the movement. PMI is currently exploring options to withdraw from the Russian market, citing a complex and rapidly changing regulatory and operating environment in Russia following the invasion of Ukraine.

The Marlboro maker, whose Russia accounts for about 6% of its net sales in 2021, said last Thursday, March 24, that it had halted sales of several of its brands and canceled all product launches in Russia for the current year.

Philip Morris International has also scrapped plans to manufacture 20 billion teria sticks (sticks designed for use with Echoes heated tobacco devices) with an associated investment of 137 million euros. The tobacco heavyweight had already suspended its investments and scaled down its manufacturing activities in Russia in early March.

Prior to PMI, the British tobacco company Imperial Brands (West, Davidoff and Galois) had already announced its withdrawal from Russia. The initiatives of these major players in this area are all the more noteworthy as Russia is the world’s fourth largest market for tobacco, with sales exceeding EUR 16 billion per year. It is estimated that more than one in three Russian adults smoke regularly.

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