Tobacco industry consolidates presence in weakly regulated states

On July 18, 2025, a high-tech tobacco production plant was inaugurated in the Aghdam Industrial Park in Azerbaijan, in the presence of President Ilham Aliyev. This project, led by the Tabaterra Group, illustrates the tobacco industry's strategy of expanding into countries with weaker regulatory frameworks and less developed prevention measures. This move is part of a broader trend observed in several Central Asian and Caucasian states.

New ultramodern factory inaugurated with support from authorities

On July 18, 2025, Azerbaijani President Ilham Aliyev officially inaugurated a new tobacco production plant in the recently rebuilt Aghdam Industrial Park. This event, widely reported by local media, is part of the government's stated desire to economically revitalize the territories formerly affected by the Nagorno-Karabakh conflict, notably by attracting industrial investment.[1].

The plant, touted as a state-of-the-art facility, was built with a total investment of $34 million. It is operated by the Tabaterra Group, Azerbaijan's sole tobacco manufacturer. It features automated production lines, modern quality control systems, and high-capacity packaging facilities. The political authorities' stated support for the project reflects a strong alignment between the country's economic priorities and the interests of the tobacco industry. During his inaugural address, President Aliyev hailed the establishment of the new facility as a significant milestone for the national industry, without mentioning the health risks, environmental implications of this activity, or the social costs associated with the consumption of these products in the country.

The project's location in a highly symbolic area, presented as a territory of post-conflict reconstruction and modernization, gives this factory a strong political dimension. This positioning helps legitimize the tobacco industry as a driver of economic development, in defiance of international provisions on public health and the country's international commitments.

Tabaterra, a strategic subcontractor for major tobacco multinationals

Founded in 2017, Tabaterra has established itself in just a few years as a key player in tobacco production in Azerbaijan and the Caucasus region. As the only domestic tobacco manufacturer, it operates as a joint-stock company and enjoys clear support from local authorities. However, its role extends far beyond Azerbaijan's borders: Tabaterra produces under license for the three largest transnational corporations in the sector—Philip Morris International, British American Tobacco, and Japan Tobacco International.

In terms of communication, Tabaterra adopts a stance aligned with that of tobacco manufacturers, particularly through the instrumentalization of corporate social responsibility (CSR). The manufacturer's website highlights a range of environmental and social initiatives. The company highlights tree planting, responsible waste management, child protection campaigns, and educational programs. This institutional communication helps shape a positive and committed image of the company, at odds with the marketing practices deployed and the documented health, social, and ecological consequences of the entire tobacco value chain.

An implementation strategy in contexts of weak regulation

The opening of the Tabaterra factory in Aghdam is part of a broader strategy adopted by tobacco multinationals to strengthen their industrial and commercial presence in countries where public health, environmental, and transparency regulations are limited. This positioning is neither one-off nor isolated: it responds to a logic of anticipation and circumvention of tobacco control policies that are becoming widespread in a growing number of countries.

Azerbaijan, like other states in the Caucasus and Central Asia, is a strategic area of interest for the industry. In the absence of a protective legislative framework for tobacco control—particularly with regard to taxation, advertising, plain packaging, or the regulation of nicotine products—these countries offer a particularly favorable operating environment for the development of this industry. Added to this is centralized institutional governance, sometimes marked by clientelism practices that facilitate the industrial anchoring of powerful economic players.

The case of Azerbaijan echoes other recent projects. In April 2025, the manufacturer KTG inaugurated a cigarette factory in Almaty, Kazakhstan.[2]This opening was hailed as an investment in the future by local authorities, in a country where smoking prevention initiatives remain very limited. Here again, public health considerations were eclipsed by promises of economic development, job creation and tax revenue.

This expansion strategy in so-called "potential" markets, often characterized by high smoking prevalence, low public awareness and weak regulatory frameworks, allows the tobacco industry to maintain the profitability of its products – cigarettes and heated tobacco in particular – while avoiding the effects of denormalization policies implemented in other regions of the world.

In addition, these establishments are frequently accompanied by major institutional communication promoting the company and the sector of activity.

This dynamic raises major concerns, both for the health of local populations and for the coherence of international tobacco control efforts. By investing in countries where tobacco control policies are poorly developed, manufacturers are preventing these countries from making progress, or even risk undermining the progress made internationally in health in recent decades or currently being negotiated in the area of sustainable development goals.

©Generation Without Tobacco

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[1] President Ilham Aliyev attended opening of tobacco products manufacturing facility at Aghdam Industrial Park, APA news, published July 18, 2025, accessed July 21, 2025

[2] Tobacco-free generation, Manufacturer KT&G opens new cigarette factory in Kazakhstan, published April 28, 2025, accessed July 21, 2025