LONDON, July 31 (Reuters) - Japan Tobacco Inc, one of the world’s biggest tobacco companies, said it will close its Moscow factory by mid-2016 due to a “serious contraction” in Russia’s tobacco market.
The company, which sells brands including Winston, Camel and LD, said on Friday it will shift production to its St. Petersburg factory in a move that will affect 573 jobs.
“The operating environment has changed dramatically in Russia, with significant declines in tobacco demand driven by tax increases, tighter regulations and a challenging economic situation,” the company said in a statement.
Impacted employees will be offered generous compensation, it said, noting the move will have a “minor effect” on the group’s consolidated performance for fiscal 2015. (Reporting by Martinne Geller in London; editing by Jason Neely)