Poland approves Philip Morris and BAT cigarette production joint venture
Poland’s competition authority has approved a joint venture between Philip Morris Products and British American Tobacco Exports. The company will organize cigarette production services but will not acquire factories, employees, raw materials or finished products.
UOKiK authorizes the joint venture
Poland’s Office of Competition and Consumer Protection, known as UOKiK, has approved the creation of a joint venture by Philip Morris Products and British American Tobacco Exports. The authority issued its concentration clearance on July 22, 2026, in decision DKK-165/2026, according to Polish retail publication dlahandlu.pl.
The new company will provide services connected with the organization of cigarette production. Its role will not include taking ownership of manufacturing plants, employing their workforces or acquiring operating assets. Philip Morris and British American Tobacco will remain the respective owners of their factories, raw materials and finished cigarettes. The arrangement therefore establishes a shared production-services structure rather than combining the companies’ Polish manufacturing assets.
Philip Morris retains an export-oriented Polish base
Philip Morris Polska operates its headquarters and factory in Kraków. The company manufactures tobacco products, approximately 70% of which are exported, dlahandlu.pl reported. This export share makes the Polish operation relevant beyond the domestic cigarette market, as changes in the organization of production can also affect supply serving foreign destinations.
The group’s other Polish entities cover distribution, tobacco procurement and business services. Philip Morris Polska Distribution, based in Kraków with an office in Warsaw and distribution centers across the country, sells and distributes tobacco products in Poland. Philip Morris Polska Tobacco contracts tobacco cultivation with growers, purchases and stores tobacco, prepares tobacco blends and supervises their production. PMI Service Center Europe, also based in Kraków, provides financial, procurement, information technology and human-resources support to PMI subsidiaries in more than 60 countries across Europe, the Middle East and Africa.
Two broad product portfolios remain under separate ownership
Philip Morris says its portfolio includes conventional cigarettes led by Marlboro and L&M, alongside newer tobacco products. These include the IQOS system, which heats specially designed HEETS tobacco sticks instead of burning them. The company states that it produces seven of the world’s 15 most popular brands. The approved venture does not change ownership of those products or of the cigarettes produced by Philip Morris.
BAT’s Polish business is part of a group operating in more than 140 markets, with 67 production facilities and more than 48,000 employees worldwide. Its portfolio includes conventional cigarettes as well as electronic cigarettes, tobacco-heating products and nicotine pouches. BAT is headquartered in London and listed on the London Stock Exchange. Following the Polish authority’s decision, the two groups can cooperate through the new production-services company while retaining control of their plants, inputs, employees and output.
Operational cooperation without an asset merger
The boundaries defined by the clearance are important for suppliers, growers, distributors and market analysts. Tobacco purchasing and storage remain within Philip Morris Polska Tobacco, while domestic sales and distribution remain the responsibility of Philip Morris Polska Distribution. The source material does not indicate any transfer of contracts with growers, distribution centers or manufacturing capacity to the venture.
The transaction may change how the two competitors coordinate selected production-related services, but it does not create a single owner for their Polish factories or cigarette inventories. No financial terms, production volumes, capacity targets or implementation timetable were disclosed in the source material. The immediate confirmed development is regulatory approval for a jointly owned service company with a narrowly defined organizational role.
