Privatization has occurred very quickly, with purchasers being the major transnational tobacco companies. The impetus for this change in the tobacco industry started in 1990, when the rapidly developing economic crisis led to the temporary closing of 50 percent of tobacco factories in the Soviet Union. During this time, the worsening currency problem made large-scale importation of cigarettes very expensive. There was civil unrest resulting from the shortage of cigarettes. The transnational tobacco companies agreed to provide the region with a total of 38 billion cigarettes at enormously discounted rates. Since then, these tobacco companies have acquired major interests in 34 former state monopolies in Central and Eastern Europe, with 12 being owned outright. Table 11-1 shows recent investment by transnational tobacco companies in Central and Eastern Europe.
The entry of the transnational tobacco industry giants into the economy and politics of the region has changed expectations for consumption over the next decade. In 1988, per capita consumption projections for the Soviet Union foresaw a negligible increase through 1998, with some projected brand switching toward filtered cigarettes (60 percent of market in 1988 to 80 percent in 1998) and a move toward milder cigarettes preferred by younger consumers and women. These projections were made with the knowledge that tobacco advertising had been banned in 1980 and that government regulation was likely to remain in