British American Tobacco (BAT) has finalized a plan to divest its operations in Russia and Belarus, announcing the agreement on Wednesday. The buyer is a consortium backed by the local government, and after the deal, the business will be rebranded as ITMS Group. BAT had signaled in March 2022 that maintaining a market presence under sanctions would be unsustainable. By mid-2022, Russia and Belarus represented about 2.7% of the group’s revenue.
In Russia, BAT’s production originated in St. Petersburg, where the company also produced tobacco sticks for Glo heating systems. Financial disclosures from SPARK-Interfax show that the Russian unit MUMT reported revenue of 247.2 billion rubles for 2022, up 9.5% from the previous year.
The exit from the Russian market began in April 2022, when Imperial Brands sold its assets to a consortium associated with Megapolis. Other players paused investments: JTI suspended new capital expenditures in Russia, and Philip Morris International explored potential restructurings, including asset transfers. These shifts reflect a broader retreat by several Western tobacco firms from the region in response to sanctions and geopolitical risks.
The departure by BAT joins a broader trend of restructuring within the industry as firms reassess exposure to Russian markets and pivot toward alternative regions. Analysts point to the impact on regional supply chains, local employment, and the strategic realignment of production capacity. The implications extend beyond immediate asset transfers, influencing pricing, distribution, and long-term market strategy for remaining operators and new entrants in the area. This realignment is expected to affect local suppliers and distribution partners who had relied on these international players for technology transfer and investment cycles.
Industry observers note that the transition of BAT’s Russian and Belarusian assets to ITMS Group may influence regulatory approvals, tax arrangements, and compliance obligations for the new owners. The deal underscores how sanctions policies and geopolitical developments continue to shape corporate strategy, asset allocation, and market presence across the region. It also highlights the resilience and adaptability of the sector as firms navigate currency fluctuations, sanctions regimes, and shifting consumer demand while maintaining ethical and legal standards in cross-border operations. [Attribution: BAT press release; SPARK-Interfax market data; industry analysis sources]”