Maker Of Marlboro Cigarettes; Philip Morris, Plans To Exit Russia

Over the years, Russia has been known as the world’s fourth-largest cigarette market by volume.

Philip Morris International Inc. on Thursday said it is working on options to leave the Russian market and join scores of multinationals that are leaving the country amid the Russian invasion of Ukraine.

According to Aljazeera, the maker of Marlboro cigarettes said it intends to leave and is considering ways to do so in an orderly fashion as it’s become too complex to do business there.

It’d be a big step out of a key market that generated 6% of total revenue last year. The country is the world’s fourth-largest cigarette market by volume, but it’s also been an important region for the growth of the company’s IQOS cigarettes alternative.

Morris said it will update its full-year forecast when it reports first-quarter results on April 21. He has already reduced manufacturing operations, suspended marketing, and canceled product launches in Russia.

“Our focus and all our efforts over the last four weeks have been to ensure the safety and security of our Ukrainian colleagues,” Chief Executive Officer Jacek Olczak said in the statement. “We stand in solidarity with the innocent men, women, and children who are suffering.”

The company has more than 3,200 employees in Russia, who will continue to be paid. Philip Morris shares fell 1% in premarket trading.

British American Tobacco Plc and Imperial Brands Plc have said they plan to transfer their local businesses to Russian partners.

Philip Morris has been facing the dilemma of limiting the damage to its reputation or staying and continuing to benefit from its second-largest IQOS market, Owen Bennett, an analyst at Jefferies, wrote earlier this month. Russia makes up about 5% of the company’s profit and consumes almost a fifth of Philip Morris’s IQOS production, Bennett said.