Russia places Japan Tobacco Russian units under temporary management

Russia seizes Japan Tobacco assets

President Vladimir Putin signed a decree on Thursday placing the Russian assets of Japan Tobacco International (JTI) under "temporary administration," according to Japan Today. The decree lists a Russian company called "Industrial Assets" as the temporary manager of four JTI corporate entities in Russia, The Moscow Times reported.

JTI said it was aware of the presidential decree and was assessing its options. In a statement to The Moscow Times, the company said: "We are assessing the situation and our options, prioritizing our stakeholders, most notably our employees."

Tokyo protests

Japanese government spokesman Minoru Kihara said two senior officials visiting Russia had lodged a protest with the Russian government together with the ambassador of Japan to Russia, and demanded the immediate withdrawal of the measure.

JT holds around 40 percent of the Russian cigarette market, according to media reports cited by Japan Today. The Russian business accounts for about 10 percent of JT Group's revenue and roughly 25 percent of its operating profit, The Straits Times reported.

Broader context

The seizure follows similar moves against other foreign companies in Russia, including German wholesaler Metro, French retailer Auchan, Swiss food giant Nestlé and logistics operator FM Logistic, The Moscow Times reported. The Straits Times said the decree follows Russia's decision to place the assets of Swiss food giant Nestle, German wholesaler Metro AG and French retailer Auchan under temporary management in September.

Relations between Japan and Russia have been strained since Tokyo and other capitals imposed broad sanctions on Moscow after its full-scale invasion of Ukraine in 2022. The Straits Times reported that relations have spiralled in recent months, following Putin's visit to a disputed island close to Japan in August and the detention of a Japanese journalist in the far eastern Russian region of Sakhalin on suspicion of espionage. Russia's FSB arrested Japanese journalist Yuki Imai of the Hokkaido Shimbun newspaper last month on allegations of espionage activities on Russian territory, Japan Today reported. Both his employer and the Japanese government deny the accusations.

Why it matters

The seizure marks the latest foreign company to lose control of Russian operations in a widening Kremlin crackdown. JTI has operated in Russia since 1999 and holds a market share of up to 40 percent, built on brands such as Winston, Camel, Sobranie and LD, according to The Moscow Times. The Japanese government owns around 37 percent of shares in Japan Tobacco, The Straits Times reported.

Sources

• japantoday.com: Tokyo demands Moscow release seized Japan Tobacco assets - Japan Today
• themoscowtimes.com: Kremlin Seizes Japan Tobacco International’s Russian Assets - The Moscow Times
• asia.nikkei.com: Putin seizes control of Japan Tobacco units as Moscow-Tokyo ties fray - Nikkei Asia
• straitstimes.com: Putin seizes Japan Tobacco's Russian assets | The Straits Times

This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.