The British American Tobacco (BAT) is finalizing its exit from the Russian market. BAT announced that it would end its sales in the controversial nation, saying that the last cigarettes would be sold within a month.
British American Tobacco Will No Longer Sell Cigarettes in Russia
A close-up view of cigarettes on June 10, 2015 in Bristol, England. Health campaigners have asked for a levy on the tobacco industry to help fund anti-smoking measures.
The Guardian reported that BAT, the London-based tobacco maker behind Camel and Lucky Strike cigarettes, will soon end its business in Russia.
The decision of BAT to end its sales in the 4th largest tobacco market in the world is part of its effort to support Ukraine against the invasion of the Kremlin.
In March, British American Tobacco was criticized because it maintained its operation in the Russian market despite the ongoing Russia-Ukraine war.
Now, BAT confirmed that it reached an agreement to sell its Belarusian and Russian businesses to another group, which is led by its Moscow management team.
"Upon completion, BAT will no longer have a presence in Russia or Belarus and will receive no financial gain from ongoing sales in these markets," said the cigarette seller via Reuters.
BAT said that once its businesses are completely sold to the consortium, they will be called as ITMS Group. The company added that the new owner will have the trademark for BAT cigarette brands.
These include its traditional tobacco products, as well as Vuse vapes and other cigarette alternatives.
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Importance of Russia to BAT
A man holds a cigarette on May 04, 2016, in Sydney, New South Wales. The Australian Government yesterday announced in their budget four annual 12.5 percent increases to tobacco excise and excise equivalent customs duties which will significantly push up the over-the-counter price up to AUD$40 by 2020.
British American Tobacco is considered to be a key cigarette manufacturer in the global tobacco market. It runs its business operations in more than 100 countries.
Among its top cigarette brands are Camel and Newport. In the Russian tobacco market, BAT controls nearly 25% of the sector.
Since Russia is the 4th largest tobacco market in the world, the Russian nation is responsible for 2.7% of the $16.73 billion revenues of the London-based cigarette maker during the first half of 2023.
Once it completes its exit, analysts estimated that British American Tobacco could lose almost $1 billion (specifically over $900 million) in its yearly revenues.
But, since it prioritizes its "ethos and values," BAT has no other choice but to leave its businesses in Russia.
The tobacco maker is not the only company that pulled out from Russia. In 2022, McDonald's, Coca-Cola, and Apple also stopped their business operations in the Russian market.
If you want to learn more details about these companies that no longer operate in Russia, you can click this link.
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