Transnational tobacco companies are trying their best to maintain their positions in Russia and at the same time make super profits in Ukraine. Vitaliy Kulyk has already written about the history of Philip Morris Corporation. It owns the following brands: Marlboro, Parliament, Bond, Chesterfield, L&M, Next, HEETS (tobacco sticks for IQOS), etc.
In 2022, Philip Morris announced its intention to sell its Russian business. But the cart is still there. The market share of Philip Morris International’s brands in Russia was more than 30% in 2019-2023. Currently, the total Philip Morris International’s investments in Russia exceeded 2 billion dollars. USD . This company is one of the largest taxpayers to the Russian budget, which then maintains and finances the Russian army. The company’s office in Russia even boasts of thanks from Putin “for a major contribution to the Russian budget”…
Ukraine has included Philip Morris in the list of countries sponsoring the war (NAPC register). Many other countries accused the campaign not only of making money on the blood of Ukrainians, but also of open cooperation with the aggressor country.
The management of the corporation makes some vague excuses, nods its head and continues to stuff its pockets with blood money. It was as if we poked their nose in their shit. We pointed out the inadmissibility of doing business with murderers who are committing genocide against Ukrainians… And what?
Do you think they did anything to leave Moscow? No! Instead, they ordered a smear campaign against critics of business with Russia. Observers point out that the media attack on MP Yevhen Petruniak has its roots in tobacco lobbyists with the smell of blood on their hands. Let me remind you that Petruniak is the initiator of several bills that were supposed to cause serious trouble for Philip Morris and other tobacco sponsors of the war. We are talking about the already mentioned Advil.
Ad valorem is a variable component of the excise tax on tobacco products that determines the amount of tax depending on their price. Back in 2013, the Azarov government deliberately reduced the ad valorem component of the Ukrainian excise tax on tobacco products from 25% to 12%. Thus, Ukrainian “Pryluky” or “Prima” were equated with premium cigarettes, such as “Marlboro”. This was done in the interests of a monopoly company close to the Yanukovych family. The same company is still on the market under a different name.
In EU countries, the ad valorem excise tax rate on tobacco products sometimes reaches as high as 52%. In other words, in Europe, if you smoke expensive premium cigarettes, you pay a much higher tax than a person who smokes cheap cigarettes. And in Ukraine: at the current ad valorem rate, one pack of cigarettes costing 55-65 UAH. UAH 50.33 is paid to the Ukrainian budget. of excise tax is paid to the Ukrainian budget, while one pack of cigarettes costing UAH 100-106. – 50.34 UAH. That is, the excise tax on a pack of cigarettes that is almost twice as expensive as the cheapest on the Ukrainian tobacco market increases by only 1 kopeck!
Do you know what else is different? The difference is that Pryluky or Prima is domestically produced and does not operate in Russia, while the manufacturer of the Marlboro brand, Philip Morris, is still financing the Russian army, which is killing Ukrainians.
In our opinion, another problem for Putin’s tobacco friends could be Petruniak’s efforts to block Philip Morris’ current initiative to reduce the excise tax on e-cigarettes, the sticks that Philip Morris actually produces, as it has a monopoly on the market. If they succeed in pushing through their agenda, Ukraine’s budget could lose tens of billions in wartime.
Everything seems simple. But, again, it is not. Some people, clearly not without motivation from transnational tobacco corporations, believe that lowering excise taxes and raising ad valorem is “casting a shadow” on the market… Dear friends! It is hard to imagine a bigger shadow than the bloody business with the Kremlin’s murderers. You cannot hide your Russian assets behind the fog of discreditable PR, even if you are a Western corporation.
As of now, the situation looks like this: people buy Philip Morris, Japan Tobacco, etc. cigarettes, the money goes to companies with dubious origins, and in the form of taxes it ends up in the aggressor country (because they have a profitable business there), from where missiles come to us.
Now the question is to our government and security forces. If we cannot impose sanctions on individual sponsors of the war (the question is why?), then at least we can protect the state budget. We have a choice: fill the budget to protect Ukraine, or let the war sponsors get billions in excess profits, some of which will be spent on new missiles and drones that will fall on our heads!