Putin puts JTI’s four Russian plants under temporary management

President Vladimir Putin signed decree No. 817 on 5 November placing 100% of the shares in four Japan Tobacco International-linked Russian companies under temporary management by JSC Industrial Assets, known in Russian as Promyshlennye Aktivy.

TASS reports the decree was published on Russia’s official legal information portal. 2Firsts, citing Interfax, says this is the first time the mechanism has been applied to a large international tobacco manufacturer.

Two cigarette plants and two leaf-processing sites are covered

The order covers cigarette manufacturing sites in St Petersburg and Rostov-on-Don, plus tobacco raw-material processing in Lipetsk region and Leningrad region, according to 2Firsts. Interfax reported the four companies as Petro, JTI Don Tabak, JTI Yelets and Kres Neva.

The two accounts name different plants for two of the four entries. TASS lists Pereslavl-Tabak and Donskoy Tabak among the transferred stakes; 2Firsts lists Petro and JTI Don Tabak. TASS is the state news agency and both reports describe the same signed decree, but neither gives a complete register of shareholdings, so the exact identity of the St Petersburg and Rostov entities remains unconfirmed.

Temporary management transfers owner rights, not the assets themselves

The manager can exercise the rights of the asset owner but cannot dispose of the assets, so the measure does not amount to a formal transfer of ownership, according to 2Firsts. The decree did not state a reason for the move.

TASS links the instrument to a presidential decree adopted in April 2023, which created temporary management of property belonging to entities from countries Russia designates as unfriendly, in response to asset seizures or restrictions on Russian owners abroad.

JTI’s Russian business carries 35.8% of the market by volume

JTI held an average 35.8% volume share of Russia’s total tobacco market in the first nine months of 2026, with sales of 59.9 billion units, down 3.6% year on year, according to Japan Tobacco’s third-quarter materials dated 29 October as cited by 2Firsts.

JTI has operated in Russia since 1999 and bought the Russian manufacturer Donskoy Tabak in 2018, 2Firsts reports. The company says it is the country’s largest tobacco producer by volume. 2Firsts puts its local footprint at four production facilities and about 4,000 employees including office staff, with brands such as Winston, Camel, LD, Sobranie and Mevius alongside Russian labels.

JTI told Interfax it is assessing the decree and possible next steps, and that it will put the interests of employees and business partners first. Separately, TASS reports the Japanese government owns one-third of Japan Tobacco; 2Firsts cites Japan Tobacco disclosure that the government held 33.34% of issued shares as of 31 December 2025, with Japanese law requiring it to hold more than one-third.

BAT and Imperial sold out; PMI stayed

The three large international groups took different routes after February 2022. Imperial Brands announced a suspension of its Russian business in March 2022 and transferred it to Russian investors, with the deal for its Volgograd cigarette factory completed on 27 April that year, according to 2Firsts. British American Tobacco announced a transfer plan the same month and completed the sale of its Russian and Belarusian businesses in September 2023 to a consortium led by members of its local management; the business now runs as the ITMS group.

Philip Morris International, which announced in March 2022 that it intended to exit, still operates in Russia. PMI’s third-quarter filing with the US Securities and Exchange Commission puts its Russian assets at about $5.6 billion as of 30 September 2026, and Russia contributed about 7% of group net revenue in the first nine months. PMI says any sale of the business would face complex regulatory requirements and constraints under international rules.

Purchasing power in the market has shifted. Russian cigarette sales were close to 206 billion sticks in 2020, fourth worldwide, according to Euromonitor data cited by Morningstar via 2Firsts. Use of e-cigarettes and heated tobacco in Russia rose 19% year on year in 2024 to about 5.3 million consumers, TASS reported, citing the consultancy FinExpertiza.

Diplomacy sets the next date for suppliers and distributors

Peace talks involving Russia, Ukraine and the United States are scheduled for Abu Dhabi on 10–11 November, according to a 3 November Reuters report cited by 2Firsts and confirmed by the Russian president’s press secretary.

For distributors and suppliers, the near-term question is operational: who signs contracts, invoices and quality documentation for the four plants while JSC Industrial Assets holds owner rights without disposal rights. JTI’s own review of the decree is the next stated step; Japan Tobacco has also said it continues to weigh options for the Russian business, including a possible transfer of ownership.

Questions readers ask

Does the decree transfer ownership of the factories to Russia?

No. The temporary manager can exercise an owner's rights but has no right to dispose of the assets, according to 2Firsts. The decree does not amount to a formal transfer of ownership.

Why did Russia act against JTI?

The decree does not state a reason. TASS ties the instrument to a 2023 presidential decree creating temporary management of property of entities from countries Russia calls unfriendly, in response to asset seizures or restrictions on Russian owners abroad.