The war in Ukraine has not only terrible humanitarian consequences, but also a hidden financial side. Tobacco corporations, which from a distance seem to have nothing to do with the war, actually play a significant role in supporting Russian aggression.
How is this possible? It’s simple: the large amounts of taxes that tobacco giants such as Philip Morris International and Japan Tobacco International pay to the Russian budget are used to finance the war.
The tobacco company Philip Morris International, which is closely linked to the Russian authorities, controls the Ukrainian cigarette market through its representatives. This was stated by Dmytro Kupyra, executive director of the Life NGO, in an interview with investigative journalist Yevhen Plinsky.
Sergei Naryshkin, Director of the Russian Foreign Intelligence Service, was a member of the Board of Directors of Philip Morris Russia for 10 years. Igor Kesayev, the Russian government’s “watchdog” for the Russian tobacco market, owns the Ukrainian distribution company Megapolis, which later transformed into Tedis Ukraine. Thanks to its ties to Yanukovych and Kaufman, Tedis Ukraine has maintained a monopoly position in the Ukrainian cigarette market, 80% of which is dominated by Russian brands.
“Tedis Ukraine and Philip Morris International pay billions in taxes to the Russian budget, effectively financing the war against Ukraine.
“Under Yanukovych, Megapolis entered Ukraine under the tutelage of Kesayev. On the Ukrainian side, Metropolis is being joined by a figure already known to all Ukrainians – Boris Kaufman,” Plinsky notes.
Serhiy Mytkalyk, executive director of the NGO Anti-Corruption Headquarters, said that the transformation of Megapolis into Tedis Ukraine and the transformation from the owners of the founders Kesayev to Kaufman helped the company to maintain its monopoly position. In other words, even after the Revolution of Dignity, this company still has Russian roots and remains a monopoly distributor of cigarettes.
“This really shows the influence of this structure, which is Megalopolis, and the state in Russia, as well as the structure Tedis Ukraine with the Ukrainian state. The Antimonopoly Cabinet, its members and powers, which is elected for 7 years to prevent a change of government for 5 years. However, during the transformation of Megapolis into Tedis Ukraine over these 10 years, the government changed, and the Antimonopoly Cabinet changed as well. And now the monopoly is still in place, and Kaufman is successfully conducting business, monopolizing further and has good connections with the current government,” summarizes Sergiy Mytkalyk.
It is worth recalling that almost a year ago, in August 2023, the National Agency for the Prevention of Corruption of Ukraine announced that Philip Morris International and Japan Tobacco International, two of the world’s largest tobacco companies, were included in the list of international sponsors of the war in Ukraine. This decision is based on the fact that these companies continue to do business in Russia, thereby financing the economy of the aggressor country.
Tobacco giants pay billions to the Russian budget. Investigative journalist Yevhen Plinsky estimates that in the first six months of the war alone (until the fall of 2022), Philip Morris International and JTI transferred more than $7 billion to the Russian treasury. This amount is more than 10% of Russia’s defense budget, meaning that every tenth ruble spent on weapons and war comes from the pockets of smokers.