Mon Sep 23 17:45:49 UTC 2024: ## Tobacco Giant Philip Morris Continues to Rake in Billions in Russia Despite Wartime Promises
**Moscow, Russia** – Despite promising to leave the Russian market in 2022 following the invasion of Ukraine, tobacco giant Philip Morris International (PMI) is still generating billions of dollars in revenue from Russia and paying hundreds of millions in taxes to the Kremlin.
In 2022, PMI’s profits from Russian sales reached nearly $8 billion, generating around $600 million in taxes for Moscow. This represents a 45% increase in net profits from the previous year, even as PMI’s associate, Igor Kesaev, faced sanctions for supplying arms to the Kremlin.
The company’s continued presence in Russia has raised questions about its previous commitment to leaving the country. PMI CEO Jacek Olczak admitted last year that the company may never leave Russia due to the complexity of withdrawing its operations. He stated that PMI prefers to keep its business open rather than sell it under Moscow’s strict conditions for foreign businesses.
This admission marks a stark reversal from the company’s initial promise in 2022 to scale down operations and eventually leave Russia. At the time, PMI faced pressure to cut off ties with Russia due to its war crimes and pledged concrete steps to discontinue its products in the country.
However, the lucrative Russian market proved too tempting to abandon. Russia accounted for 9% of PMI’s cigarette and heated tobacco sales in 2023, making it the company’s third-largest market after Indonesia and Turkey. PMI still holds a 32% market share in Russia. Additionally, nearly 14% of PMI’s global IQOS sales, a heated tobacco product, originate from Russia.
The company reported adjusted profits of $1 billion from Russia and Ukraine in 2022, despite Ukraine designating PMI as an international sponsor of the war. The millions in taxes paid to Russia by PMI provide crucial revenue to Moscow as it struggles to fund its war machine amidst international sanctions.
Watchdog groups have criticized companies like PMI for remaining in Russia and contributing to the Kremlin’s war effort through tax revenue.
PMI has also faced scrutiny for its association with Russian billionaire Igor Kesaev, who has been sanctioned for supplying arms to Moscow. Kesaev, a PMI business associate, reportedly leveraged his holdings in tobacco distribution and weapons production to aid Russia’s war efforts.
Despite repeated requests for comment, PMI has yet to address its past promises and the status of its business operations in Russia.
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