TABLE 11-1 Recent Transnational Tobacco Company Investments in Central and Eastern Europe

Region

Plants

Percent Ownership

Cigarette Production Capacity (billions)

Russia

10

49-100

127

Other NIS

17

51-97

66

Baltic

3

45-65

16

Other Eastern Europe

16

10-100

148

NIS = New Independent States.

SOURCE: Connolly (1994).

force. The entrance of the transnational tobacco companies significantly changed that scenario.

In purchasing tobacco plants in Central and Eastern Europe, the transnational tobacco companies have significantly increased their manufacturing capabilities.2 It is expected that the long-term goals of the companies are to expand cigarette production within the region, to expand per capita consumption levels toward those seen in the United States, and to increase the level of profitability for each cigarette sold.3

To promote higher consumption levels, the industry might be expected to follow the prescription that has been so successful in other countries: large marketing expenditures and the use of their economic might to create pressure. Indeed, the new tobacco industry in the region has moved quickly to begin stimulating demand for major brands of cigarettes produced by the transnational tobacco companies. The industry has started by completely ignoring the advertising ban. Connolly (1994) reports that of the 6,723 billboards in Moscow, 70 percent advertise tobacco products—almost exclusively key multinational brands. Indirect advertising of Marlboro and Rothman's is widespread on Moscow television. During one feature film, three commercial breaks advertised Lucky Strikes. In July of 1993, the Moscow City Council took its own action to ban tobacco advertising, and a similar ban passed in the Russian Parliament. However, the Press Ministry has refused to enforce the ban, citing the importance of the advertising revenue. Prokhorov and Alexandrov (1994) report that the Moscow Department of Public Transportation has noted an enormous expansion of protected bus stops featuring tobacco advertising. Further, the Moscow Trade Department has indicated that there will be a significant increase in ''brand-name" tobacco kiosks in Moscow, thus increasing the ease of access to Western-brand cigarettes.

Recent evidence suggests, moreover, that there has been a rapid increase in smoking prevalence among young adult women in the NIS, with prevalence



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