⚠ Russia: Nine Percent of the VolumeModerate threat

Philip Morris International (PM) — threat to the moat

Russia is still about 9% of PMI's volume and 6% of its revenue, in a market where the state has already forced a localisation.

PMI still sells a large amount of tobacco in Russia. The country accounted for about 9% of PMI's cigarette and heated-unit volume in 2025 and about 6% of net revenues; Ukraine was about 2% and 1%1. For a company whose peers have largely left, that is a significant exposure to a market run under sanctions and war.

Share of PMI 2025 volume and revenue (%)about 9Russia, volumeabout 6Russia, revenueabout 2Ukraine, volumeabout 1Ukraine, revenuePMI Form 10-K FY2025
A large exposure to a hostile state.

The Russian state has already acted. PMI's 10-K describes a forced localisation in August 2024 and sanctions on Igor Kesaev, a former co-shareholder of PMI's distributor there2. In 2024 PMI recorded a $77 million charge related to a localisation tax at the distributor TKM3. Exports of heated-tobacco devices to Russia are restricted4, which limits the smoke-free switch in the one large market where PMI's cigarettes are most exposed.

How the revenue flows through the distributor is covered on the Major Clients page. The threat here is operational: the government can change taxes, ownership rules and supply at will, and the company has limited recourse.

The trigger to watch is a further Russian measure against foreign tobacco companies. A forced sale or a ban on repatriating profits would remove about 6% of revenue at a stroke.

References
  1. ReportedThe country accounted for about 9% of PMI's cigarette and heated-unit volume in 2025 and about 6% of net revenues; Ukraine was about 2% and 1%.
    Philip Morris International Form 10-K for fiscal 2025 - Item 1A risk factors and legal proceedings: excise, Germany, Russia, Canada and credit. — FY2025 · publ. 6 February 2026 · source ↗
  2. ReportedPMI's 10-K describes a forced localisation in August 2024 and sanctions on Igor Kesaev, a former co-shareholder of PMI's distributor there.
    Philip Morris International Form 10-K for fiscal 2025 - Item 1A risk factors and legal proceedings: excise, Germany, Russia, Canada and credit. — FY2025 · publ. 6 February 2026 · source ↗
  3. ReportedIn 2024 PMI recorded a $77 million charge related to a localisation tax at the distributor TKM.
    Philip Morris International Form 10-K for fiscal 2025 - Item 1A risk factors and legal proceedings: excise, Germany, Russia, Canada and credit. — FY2025 · publ. 6 February 2026 · source ↗
  4. ReportedExports of heated-tobacco devices to Russia are restricted, which limits the smoke-free switch in the one large market where PMI's cigarettes are most exposed.
    Philip Morris International Form 10-K for fiscal 2025 - Item 1A risk factors and legal proceedings: excise, Germany, Russia, Canada and credit. — FY2025 · publ. 6 February 2026 · source ↗
Sources
Generated September 26, 2026