Tobacco giants help fund Putin’s war machine with £7bn in taxes
Despite pledge to exit Russia cigarette makers have been pouring money into Kremlin’s coffers
TOBACCO companies have paid almost £7bn in taxes to the Kremlin since the invasion of Ukraine, despite vowing to pull out of Russia.
Analysis of Russian treasury figures by The Daily Telegraph shows that the Kremlin has received 480bn roubles (£6.8bn) from the tobacco industry in the last eight months.
London-based British American Tobacco, Philip Morris International and Japan Tobacco International hold more than 90pc market share in Russia, meaning the three companies alone have contributed at least £6.3bn.
Center LIFE, an anti-smoking lobbying group in Ukraine, estimates that 2020 taxes from PMI and JTI would fund 700 Mil Mi-24 helicopters, 1,970 T-72 tanks and 382 Sukhoi Su-25 fighter jets for the Russian army.
Bob Seely, a Tory MP on the foreign affairs committee, said: “It’s clearly completely wrong that these Western firms continue to pay significant taxes into Russian coffers. These companies said they would not support the Russian state and they would do the right thing, but they patently haven’t done that.”
BAT initially refused to cut ties following the invasion of Ukraine, before reversing its decision amid public pressure. It has not yet left Russia, however.
In March, PMI discontinued some of its products in Russia and halted marketing activities there, saying it intends to exit in an “orderly manner”.
But rival Imperial Brands is the only company so far that has actually sold its Russian operations.
JTI said it would suspend all new investments and marketing, but has made no commitment to leave. Photographs shared with The Telegraph show PMI has started to include the Ukrainian flag on its adverts in the country and asked customers to donate to the army.
Deborah Arnott, chief executive of Action on Smoking and Health, said: “Most transnational companies trading in Russia have pulled out, recognising their responsibility to do all they can to help end Russia’s devastating war on Ukraine. However, it’s hardly surprising Big Tobacco think they can carry on trading no matter what Russia does as this is an industry without a moral compass, whose products killed around 100m people in the 20th century and are on track to kill a billion in the 21st.”
Taxes from the tobacco industry remain an important source of income for the Kremlin.
The latest available Russian treasury figures show tax revenues from the industry stood at 727bn roubles last year. Averaging 60bn roubles per month, this means the Kremlin is likely to have pocketed £6.8bn in the eight months since the invasion.
A spokesman for JTI said: “JTI operates in all its markets in full compliance with national legislation and tax requirements.” A BAT spokesman said: “The complex process of transferring our Russian business in full compliance with international and local laws is ongoing. Upon completion, BAT will no longer have a presence in Russia.”
Labour MP Alex Cunningham said: “Tobacco firms put profits ahead of everything else so I’m not surprised they are happy to bolster their business by trading with whoever they like, warmongers included.
“That the Russian economy has benefited from £6bn from the industry at a time they’re funding an illegal war against Ukraine beggars belief. It is now time for the British Government to intervene and make it clear to tobacco companies that they are expected to follow the lead of responsible companies and stop trading with Russia now.”
PMI was contacted for comment.