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One of the world's largest tobacco companies, British American Tobacco (BAT), is pulling out of Russia in the wake of the country's invasion of neighbouring Ukraine.
The multinational cigarette manufacturer said on Monday morning it reviewed its presence in Russia in a "highly complex, exceptionally fast-moving and volatile" context, and that it prided itself on its "values and ethos".
"We have concluded that BAT’s ownership of the business in Russia is no longer sustainable in the current environment," it said in a statement.
"Today, we have initiated the process to rapidly transfer our Russian business in full compliance with international and local laws. Beyond continuing to pay our 2 500 employees, we will do our utmost to safeguard their future employment. Upon completion, BAT will no longer have a presence in Russia."
BAT, headquartered in London, is the second-largest tobacco company in the world. BATSA in South Africa forms part of the group. Brands include Dunhill, Kent, Vogue, Rothmans, Pall Mall and Lucky Strike.
It now joins numerous major international companies that have divested their interests in Russia, or suspended operations as countries across the world impose sanctions on the country.
BAT has a market share of almost 24% in the Russian tobacco market. Fin24 reported last week that BAT has lost more than R110 billion – more than 7% - of its market value since the invasion. Its e-cigarette brand glo is the second-biggest in the country, measured in volume.
The company said on Monday that given the impact of the war, including on operations in Ukraine, it was revising its guidance for the rest of the year. In 2021, Ukraine and Russia accounted for 3% of group revenue.
"We now expect constant currency group revenue growth of 2% to 4% and mid-single figure constant currency adjusted diluted earnings per share growth."
with Carin Smith
