British American Tobacco (BAT), one of the world’s largest manufacturers of tobacco products in the world, has suspended its work and business operations in Ukraine due to the military invasion of the Russian Federation, while in the Russian Federation the corporation will suspend all planned capital investments and “rationalize its marketing activities”.
The corresponding statement was posted on the corporation’s website on Wednesday.
“In Ukraine, we have suspended all business and manufacturing operations and are providing all the support and assistance we can to our colleagues, including relocation and temporary accommodation. Our businesses bordering Ukraine are providing assistance to the humanitarian relief effort. In Russia, we have a full establishment of our people right across the country, including substantial local manufacturing. Our business in Russia continues to operate. As a key principle we have a duty of care to all our employees at this extremely complicated and uncertain time for them and their families,” it said in the report.
“We are deeply concerned about the conflict in Ukraine. The safety and wellbeing of our people there and across the region is our first priority. We have full local establishments of 1,000 people in Ukraine and 2,500 in Russia. Our thoughts are with them all at this incredibly difficult time,” the report says.
“We have suspended all planned capital investment into Russia and will focus on our portfolio of locally produced tobacco products – including our heated tobacco products. Furthermore, we are scaling our business activities appropriate to the current situation, including rationalizing our marketing activities. This fast-moving and complex situation demands us to constantly assess a wide range of factors and considerations. We are complying, and will continue to comply with, all international sanctions related to this conflict in full,” the company said.
The Northern Commercial Court of Appeal on February 23 upheld a complaint of PJSC A/T B.A.T. – Pryluky Tobacco Company owned by British American Tobacco (BAT) related to the decision of the trial court and the Antimonopoly Committee of Ukraine on imposition of a fine UAH 450 million, the company’s press service said on Wednesday.
“The Court of Appeal has carefully examined the evidence and facts of the case and has found erroneous the legal position of the court of the first instance and groundless the qualifications of the Antimonopoly Committee of Ukraine, on which we have been repeatedly emphasizing,” the press service of BAT said.
The company said that it welcomes the decision of the Court of Appeal. After more than a year of judicial debates, we have finally achieved justice in our cause and proved our rightness. The company believes that the court’s decision guarantees the stable functioning of the constitutional state in Ukraine and serves as a strong positive signal to investors from around the world. The press service of the company told Interfax-Ukraine that B.A.T. – Pryluky did not admit his guilt and did not pay the fine imposed by the committee in the amount of UAH 450 million.
As reported, the Antimonopoly Committee in October 2019 imposed a fine of UAH 6.5 billion for anti-competitive concerted actions on cigarette manufacturers and distributors: UAH 3.4 billion on Tedis Ukraine, UAH 370 million on Philip Morris Sales and Distribution, UAH 810 million on Philip Morris Ukraine, UAH 430 million on PJSC JT International Ukraine, UAH 490 million on PJSC JT International Company Ukraine, UAH 170 million on Imperial Tobacco Production Ukraine, UAH 290 million on Imperial Tobacco Ukraine, UAH 80 million on British American Tobacco Sales and Marketing Ukraine LLC, UAH 450 million on PJSC A/T B.A.T. – Pryluky Tobacco Company, and also ordered these companies to stop violations.
According to the court decisions database, the Northern Commercial Court of Appeal heared the claim of B.A.T. – Pryluky over the fine imposed by the committee behind closed doors at the request of the committee.
On January 26, 2021, British American Tobacco Sales and Marketing Ukraine lost an appeal over the fine of UAH 80 million paid by the company with the Northern Commercial Court of Appeal. According to the company, the fine imposed by the committee was paid to avoid the accrual of penalties, although the manufacturer did not admit his guilt.
At the same time, Tedis Ukraine on February 2 was the first to achieve the satisfaction of the appeal against the committee in the Supreme Court and the invalidation of the fine of UAH 3.4 billion, which the company has not yet paid. The Supreme Court said that it upheld the cassation due to the impossibility of bringing any person to justice on the basis of decisions of the committee in other cases (as adjudicated), without obligatory proof of guilt in each individual case and taking into account the erroneous legal qualification of actions of Tedis Ukraine LLC.
British American Tobacco (BAT) has started selling tobacco heating systems under the glo trademark in Ukraine. “Ukraine is the tenth market in the world where we are launching the electronic device glo, a product with a potentially reduced risk in which tobacco is heated rather than burnt. This product has been developed in the U.K. for more than four years. In the past six years, British American Tobacco has invested more than $2.5 billion in research and development of alternatives to smoking with a potentially reduced risk,” CEO of British American Tobacco Ukraine Simon Welford said at a presentation of the product on Thursday.
According to him, over the past four years the company has invested about $50 million in development in Ukraine.
“Marking this year the 25th anniversary of our business in Ukraine, we see great opportunities in this country. We are the largest British investor in Ukraine. To date we have invested $520 million,” Wellford said.
He said that today the capacity of the Ukrainian tobacco factory BAT-Pryluky (Chernihiv region) is 22 billion pieces per year.