Russian Tobacco Makers Relaunch Iconic Soviet Cigarette Brands

The Russian tobacco market has been showing a curious trend recently. The cheapest and premium class cigarette brands currently enjoy the biggest demand in Russia. Many tobacco companies focus their efforts on the inexpensive segment and resume the production of Soviet brands, BFM.ru business portal said.




“According to our estimates, the reduction of the Russian tobacco market during the first half year made up 3-4 percent,” Kingsley Wheaton, the managing director of British American Tobacco Russia (BAT Russia) said. The sales of cheap cigarettes are growing, but they are growing in the premium segment of the market too, he said.

Another participant of the Russian tobacco market – Philip Morris – also reported a growth in the sales of its low price segment cigarettes (Bond Street). The sales gained 35 percent during the second quarter of the year – Optima cigarettes went 23 percent up. More expensive brands of the company demonstrated negative dynamics in their sales. Marlboro dropped by 19 percent with Parliament losing 4.3 percent.

BAT Russia took account of the changing demand and launched two new brands – Capri slim cigarettes (prices at $0.8 per pack) and The Golden Fleece (Zolotoye Runo), - a legendary Soviet brand which the company relaunched in April (priced up to $0.48 per pack).

The cigarette brands with the Soviet past from another company, Nevo-Tabak, also managed to improve their sales. The sales of such brands as Arktika, Troika and Leningad improved considerably during the recent six months.

“BAT Russia is not a pioneer when it comes to the launch of iconic Soviet cigarettes. This has been happening on the market of alcohol beverages too. One may recollect the fight of the Moscow Distillery Cristall for such well-known Soviet brands as Pshenichnaya and Stolichnaya. Dairy companies design Soviet-style packaging to win customers’ attention to their products. They hope that the Soviet style packaging will make many recollect their past and buy the product that they know, not something new that they never tried before,” Sergey Tishenko, a senior expert with Business System Development Auditing Company says

Context History of START I (Strategic Arms Reduction Treaty) and START II

The Treaty on the Reduction and Limitation of Strategic Offensive Arms (START I) between the Union of Soviet Socialist Republics (U.S.S.R.) and the United States (U.S.) was signed in Moscow on July 31, 1991 at a summit meeting between Soviet and U.S. presidents, Mikhail Gorbachev and George Bush, and entered into force on December 5, 1994. It was the first agreement of this kind between the U.S.S.R. and the U.S. The purpose of the Treaty was to ensure parity between the two sides’ strategic nuclear forces at levels 30% down on initially deployed forces.



The Treaty established equal ceilings on warhead and delivery vehicle numbers and ceilings on the throw-weight of ballistic missiles. Under the Treaty, neither side could have more than:

- 1,600 nuclear warhead delivery vehicles /deployed intercontinental ballistic missiles (ICBMs), ballistic missiles (BMs), submarines and heavy bombers/;

- 6,000 warheads, with 4,900 deployed on submarine-based ICMBs and BMs, 1,540 deployed on 154 heavy ICBMs in the U.S.S.R. (the U.S. had no heavy ICBMs), and 110 deployed on mobile ICBMs.



The Treaty left out sea-launched cruise missiles with a range of over 600 km. But a pledge was made not to deploy more than 880 SLCMs.



The collapse of the U.S.S.R. made START I outdated. On May 23, 1992, in Lisbon, Russia, Belarus, Kazakhstan, Ukraine and the U.S. signed the so-called Lisbon Protocol to START I, which came into effect on December 5, 1994. The Protocol records the inclusion of Belarus, Kazakhstan and Ukraine in the START Treaty and at the same time requests that they join the Nuclear Non-Proliferation Treaty. START I is valid for 15 years (until December 5, 2009). Given the parties’ agreement, its term can be extended for another 5 years when the 15 years are up.



On December 6, 2001, official representatives of Russia and the U.S. reported that their countries had fulfilled their START I obligations.



The Treaty on Further Reduction and Limitation of Strategic Offensive Arms (START II) between Russia and the U.S. was signed by the Russian and U.S. presidents on January 3, 1993 in Moscow, but never went into effect.



The Treaty bans using ballistic missiles with independently targetable warheads.



On September 26, 1997, in New York, the Russian Foreign Minister and the U.S. Secretary of State signed a Protocol to START II, providing for a postponement of the Treaty for 5 years, from December 31, 2001 to December 31, 2007. The delay was due to the fact that the first stage of the Treaty was to be completed within seven years of START I coming into force (it became effective on December 5, 1994), that is to say by December 31, 2001. This meant that should START II be ratified, for example, in 1997-1998, its implementation period would be cut back considerably – by 3 to 4 years.



The Russian side ratified the Treaty together with the Protocol on April 14, 2000 on the condition that the ABM Treaty be preserved. The U.S. ratified the Treaty in January 1996, but the Treaty in the same package with the September 26, 1997 Protocol was never submitted for ratification and therefore was considered non-ratified.



When the U.S. withdrew from the ABM Treaty on June 13, 2002, Russia announced it was stopping observance of its commitments under START II Treaty. On June 14, 2002, the Foreign Ministry of Russia issued a statement saying that following the U.S. abandonment of the ABM Treaty, “the Russian Federation sees no grounds for giving force to START II and no longer considers itself bound by the undertaking, stipulated by international law, to refrain from steps which could strip the Treaty of aim and objective.”



At a May 24, 2002 summit in Moscow, the presidents of Russia and the United States concluded an additional Strategic Offensive Reductions Treaty (SORT) to limit the number of operational nuclear warheads to 1,700-2,200 for each party. These ceilings are to be reached by December 2012, with the sides still retaining the right to decide the make-up and structure of strategic offensive weapons.



In 2005, Russia proposed that a new agreement is concluded with the U.S. to replace the START Treaty.

Russia, US agree nuclear arms cuts in Obama visit

Germany sees 'new spirit' in Russia-US ties
German Foreign Minister Frank-Walter Steinmeier on Monday welcomed a joint determination by Russian and US leaders to reduce their countries' strategic nuclear weapons and said he saw a "new spirit". "I welcome today's Moscow declaration," Steinmeier said in a statement issued by his ministry. "It is the sign of a new spirit in Russian-US relations: the armament scenarios are part of the past. Today there is a joint will to make progress in the disarmament field." During talks in Moscow presidents Dmitry Medvedev and Barack Obama earlier Monday announced agreements on Afghanistan and cutting their nuclear arsenals as they sought a new era in battered relations. Their agreement shows that "the two nuclear powers take their disarmament obligations under article 6 of the nuclear non-proliferation treaty seriously", said Steinmeier. "This is an important signal for the conference that is to look into the treaty next year," he added. Steinmeier said this new "positive momentum" should be used to reach new disarmament targets. "We need substantial progress in disarmament policies," he said. The declaration signed by the two presidents pledges to reach a new nuclear arms reduction pact to replace the 1991 Strategic Arms Reduction Treaty (START). Obama said it provides for cuts of "up to a third" from current limitations. START is due to expire on December 5 but the declaration gave no target date for a renewal, instructing negotiators to complete the work as quickly as possible. The declaration called for a reduction in the number of nuclear warheads in Russian and US strategic arsenals to between 1,500 and 1,675 within seven years and the number of ballistic missile carriers to between
The Russian and US leaders Dmitry Medvedev and Barack Obama on Monday announced agreements on Afghanistan and cutting their nuclear arsenals as they sought a new era in battered relations.
The ex-Cold War foes issued a declaration on replacing a key disarmament treaty -- including figures for major cuts in nuclear warheads -- and clinched a breakthrough deal for US military transit for Afghanistan across Russia.

But as Obama made his first visit to Moscow as president, they still remained divided over US plans to install a missile defence shield in eastern Europe and Moscow's policy towards the pro-Western ex-Soviet state Georgia.

"The president and I agreed that the relationship between Russia and the United States (has suffered) from a sense of drift," Obama said at joint news conference in the Kremlin with Medvedev.

"We resolved to reset US-Russian relations. Today after less than six months of collaboration (since coming to office) we have done exactly that," he added.

The declaration signed by the presidents pledges to reach a new nuclear arms reduction pact to replace the 1991 Strategic Arms Reduction Treaty (START). Obama said it provides for cuts of "up to a third" from current limitations.

It "commits both parties to a legally binding treaty that will reduce nuclear weapons," the White House said in a statement.

START is due to expire on December 5 but the declaration gave no target date for a renewal, instructing negotiators to complete the work as quickly as possible.

The declaration called for a reduction in the number of nuclear warheads in Russian and US strategic arsenals to between 1,500 and 1,675 within seven years and the number of ballistic missile carriers to between 500-1,100.

The cuts go beyond those levels set in the 2002 Strategic Offensive Reductions Treaty (SORT) which calls for both countries to reduce the number of deployed warheads to between 1,700 and 2,200 on either side by 2012.

"The declared reduction is a real agreement and it suits everyone," said Alexei Malashenko, analyst with the Carnegie Centre in Moscow.

"The Americans have decided to accept Russia as it is. Obama does not have the complexes from the Cold War and does not consider Russia to be an enemy of the United States."

Obama also proposed that the United States host a global nuclear security summit next year and suggested to Medvedev that Russia host a subsequent one in order to draft a new, "reinvigorated" non-proliferation treaty.

The Afghanistan agreement means Russia has authorised the use of its airspace for the transit of US troops and arms, a major boost for Obama's bid to step up the fight against the Taliban.

The deal permits up to 4,500 military flights per year, or about 12 per day, which can be loaded with troops, firearms, ammunition, military vehicles and spare parts, a senior US official said.

The official said military flights would not be charged air navigation fees and that they would not stop on Russian territory.

Previously Russia had only allowed the United States to ship non-lethal military supplies across its territory by train.

The two sides also signed an agreement to resume bilateral military cooperation suspended last August over Moscow's war in Georgia, an event which sent ties plummeting to a post Cold War low.

But amid the smiles and expressions of goodwill, the US plan to install missile defence facilities in the Czech Republic and Poland -- which Russia says threatens its security -- remained a major sticking point.

"The discussions on missile defence are proceeding with great difficulty because the approaches are very different," Russian Deputy Foreign Minister Sergei Ryabkov said, according to ITAR-TASS news agency.

Obama expressed hope however that "over time we will have seen that the US and Russian positions can be reconciled" and announced that both sides would step up their joint analysis of missile threats.

He also bluntly repeated the US dissatisfaction with Russia's recognition of two breakaway Russian regions as independent, Georgia's sovereignty and territorial integrity "must be respected".

"There are areas where we still disagree...we had a frank discussion on Georgia".

Obama was on Tuesday morning due to meet with Russia's powerful Prime Minister Vladimir Putin, a man who he described in the run-up to the summit as having "one foot" in the past of the Cold War.

He did not repeat that comment in the news conference, acknowledging that Putin was one of the "influential" figures he was going to meet and noting that Russia's ruling tandem were "working very effectively together".

Obama asks Putin to give up Cold War, looks at a Korean Missile Crisis

This week, on the eve of his first trip to Russia, President Barak Obama criticized the Russian Prime Minister Vladimir Putin for having a foot left in the Cold War. During his speech Obama, cited that the new President of Russia, Dmitry Medvedev, is more adapt to moving forward from this past.


With the discussion of the START I treaty at the head of the summit’s agenda, Obama is not treading lightly in regards to this former enemy. However, with the prospects of a reduction in nuclear arms and at least a discussion on SDI (Strategic Defense Initiative), both sides are looking for heavy concessions.


Obama wants to dramatically cut our nuclear arsenal, while the Russians would like for the U.S. to abandon its SDI program. This may pose a problem on a few different fronts.


As of 06:37 on 4 July, it is reported that North Korea has launched up to 7 missiles off their eastern coast. This will further defy the UN resolution following the May underground test of a nuclear weapon. North Korea is and has been pursuing a myopic foreign policy that is making the world scratch their heads.


While the United States still believes in diplomacy in regards to North Korea, many wonder what a possible ICBM (Intercontinental Ballistic Missile) launch towards Hawaii, set for the July 4th Holiday, will do for relations surrounding the area.


According to analysts at the Nuclear Threat Initiative (NTI), a think tank that analyzes nuclear issues, there is a belief that such a launch, coupled with a pursed nuclear agenda, could send the region into to a ripple effect of chaos.


It is thought that Japan, who has not had a standing army since WWII, may feel the need for a military buildup to offer itself a significant defense against North Korea. If this were to occur, China, who is already torn between a natural ally in Korea and desired ally in the United States, believes this could lead to nuclear proliferation within the region, in essence creating another Cold War. If such were to happen, China would most likely react accordingly. With essential ties to the North, if Japan were to rearm and pursue nuclear weapons for defense, China would be in a position to have to choose between a lesser of two evils.


As Obama discusses nuclear arms reductions with Moscow, they are in a wait and see mode. Their nuclear supply is believed to be somewhere in the neighborhood of 14,000 units, which far outnumbers any other nation, including the U.S.


It is doubted that a missile launch from Korea would even come anywhere close to Hawaii. In any event, the U.S. has deployed countermeasure to intercept any threat.

Business Shanghai group backs Russian proposal on common currency

- The leaders of Shanghai Cooperation Organization countries backed on Tuesday Russia's proposal on using national currencies in mutual settlements and introducing a common currency for the group.

The common currency would be similar to the European currency unit, in use in the EC until the introduction of the euro in 1999.

The SCO, which comprises Russia, China and four ex-Soviet Central Asian republics - Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan - held a summit in the Russian Urals city of Yekaterinburg on Tuesday.

The summit's participants said that the current structure of the world currency system, dominated by the U.S. dollar as the major global reserve currency, was far from ideal and that the appearance of new reserve currencies was inevitable.

Russian President Dmitry Medvedev told the summit that the Shanghai group member states should increase the share of national currencies in mutual settlements to reduce dependence on the dollar and improve the health of the global financial system.

"The current set of reserve currencies and the main reserve currency - the U.S. dollar - have failed to function as they should," Medvedev told the summit, adding that the Russian ruble could hopefully become a reserve currency in the foreseeable future.

US cybersecurity

President Barack Obama announced on Friday the creation of a new “cyber czar” position. The Cybersecurity Coordinator, who is yet to be named, would oversee billions of dollars in funding for developing and coordinating defense of the computer networks that operate the global financial system and domestic transportation and commerce, according to the administration. The position, which Obama said would report directly to him, results from a 60-day “cyberspace policy review” Obama ordered.

Obama's announcement was overshadowed by the US military's imminent creation of a new military “Cyber Command,” detailed in a New York Times article published Friday. Obama has not even been presented with the military's plan, nor did he mention it directly in his press conference. However, administration sources have said he will sign a classified order or set of directives later this month authorizing the creation of the Cyber Command.

Media accounts indicate that the formation of the parallel domestic and military cyber security agencies was the source of a bitter “turf battle” between and within competing national security and federal domestic agencies.

As a compromise, Obama's domestic Cybersecurity Coordinator would report to both the National Economic Council (NEC), a White House economic advisory group, and the National Security Council, the top-level presidential advisory group that coordinates foreign and military policy, thus ensuring “a balance between homeland security and economic concerns,” the Washington Post reports. Obama's top economic advisor, Lawrence H. Summers, fought for a dominant role for the NEC so that “efforts to protect private networks do not unduly threaten economic growth.”

In his Friday press conference, Obama sought to present the Cybersecurity Coordinator position in the most innocuous terms, referring to the “spyware and malware and spoofing and phishing and botnets.” and “cyber thieves” that anyone with access to the Internet confronts. Obama emphasized that the measure would not include “monitoring private sector networks or Internet traffic. We will preserve and protect the personal privacy and civil liberties that we cherish as Americans,” he said. “Indeed, I remain firmly committed to net neutrality so we can keep the Internet as it should be—open and free.”

But the creation of high-level police agency tasked with overseeing the Internet raises troubling questions. As the New York Times notes, it “appears to be part of a significant expansion of the role of the national security apparatus” in the White House.

Meanwhile, legislation working its way through Congress, the so-called Cybersecurity Act of 2009, would grant the US government unprecedented control over the Internet. The bill gives the president unrestricted power to halt Internet traffic, ordering the shutdown of both government and privately owned and operated networks deemed related to “critical infrastructure information systems,” merely by declaring a “cybersecurity emergency.”

In his remarks, Obama pointed to the threat of cyber terrorism, noting that US “defense and military networks are under constant attack. Al Qaeda and other terrorist groups have spoken of their desire to unleash a cyber attack on our country.” He invoked the recent terror attacks on Mumbai, India, where “terrorists...relied not only on guns and grenades but also on GPS and phones using voice-over-the-Internet.” Obama also alluded to the possibility of cyberwarfare with a major foe, mentioning Russia by name. “Last year we had a glimpse of the future face of war,” Obama said. “As Russian tanks rolled into Georgia, cyber attacks crippled Georgian government websites.”

However, these sorts of threats would most likely not fall under the purview of the Cybersecurity Coordinator, at least based on Obama’s explanation of the position. The implication is that these “threats” would be handled by the military-intelligence Cyber Command.

Reports indicate that there is an acrimonious struggle within the national security apparatus over who should oversee the new command. Currently, the National Security Agency (NSA) controls most of the functions that would be associated with cyberwarfare. Created by Democratic President Harry S. Truman in 1952 at the height of the Cold War, the NSA is a spy agency tasked with breaking the codes and signals of foreign entities and encrypting sensitive US government communications. It is overseen by a military figure—either a lieutenant general or vice admiral—and the NSA reports to the Department of Defense.

In March, Rod Beckstrom, the Department of Homeland Security’s cyber-security head (Director, National Cybersecurity Center) resigned in protest over the NSA appearing to win out in the struggle over who should “defend” domestic computer networks. In his resignation letter, which was leaked to the press, Beckstrom implied that the Office of Management and Budget had conspired with the NSA to starve his own agency of funding, and raised the threat posed by the NSA overseeing domestic computer-spying operations. “The threat to our democratic processes are significant if all top government network security and monitoring are handled by any one organization (either directly or indirectly),” Beckstrom wrote. “During my term as director we have been unwilling to subjugate the NSCS underneath the NSA.”

A Wall Street Journal report at the end of April indicated that the head of the Cyber Command would be current NSA chief, General Keith Alexander. Other accounts indicate that the Cyber Command would more likely report at first to the military's Strategic Command, which oversees the nation's nuclear arsenal, according to sources cited in the New York Times. And still other sources have said NSA personnel could be moved into a new military command structure under the control of the Pentagon.

In any case, the formation of the Cyber Command raises the threat of the military or the NSA launching operations within the US. Both are currently constitutionally-prohibited from carrying on either military or spy actions within American borders. One anonymous “senior intelligence official,” cited in the Times, called this “the domestic spying problem writ large.”

“These attacks start in other countries, but they know no borders,” he said. “So how do you fight them if you can’t act both inside and outside the United States?” The answer, implied by the very formation of the Cyber Command, is that the military and spy agencies should disregard the traditional separation of foreign war and espionage, on the one hand, and domestic policing and investigation, on the other.

According to the Defense Department, in 2008 360 million attempts were made to breach its computer networks. It also reported that the Pentagon spent $100 million in the past six months to repair damage done by hackers, most of whom work from Russia and China, it is claimed. In early April the Wall Street Journal reported that hackers had penetrated the national electricity grid and even the Pentagon's $300 billion Joint Strike Fighters program.

Yet despite the rhetoric about national defense, comments from administration sources and military figures make clear that motivating the creations of the military cyber defense is its offensive capabilities. “We are not comfortable discussing the question of offensive cyberoperations, but we consider cyberspace a war-fighting domain,” said Bryan Whitman, an Obama Pentagon spokesman. “We need to be able to operate within that domain just like on any battlefield, which includes protecting our freedom of movement and preserving our capability to perform in that environment.”

As they opened arms-reduction talks, the United States and Russia were urged Tuesday to set aside their recent antagonism and unite to thwart Iran's pursuit of nuclear weapons.


That was the underlying message of two separate reports, released Tuesday, that address Tehran's growing nuclear ambitions as well as the falling out that has occurred between Washington and the Kremlin in recent years.


Russia's war last summer with neighbour Georgia, as well as former U.S. president George W. Bush's plan to base a missile defence shield in Eastern Europe to protect the greater continent against Iranian and North Korean missile launches, have strained relations between Moscow and Washington.


A coalition of leading American and Russian scientists concluded Tuesday that the Pentagon's proposed missile shield for Europe — a plan Russia views as a hostile — would do nothing to protect against an Iranian missile attack.


"If Iran were to attack Europe with more than one or two missiles, the European missile defence system as proposed could not defend Europe," says the report by the New York-based independent think-tank, the EastWest Institute.


The report urges U.S. President Barack Obama's new administration to "conduct a serious technical review of the capabilities" of the shield proposal, which would base sensors and interceptor rockets in Poland and the Czech Republic.


The Russian and American scientists urged the Kremlin and Washington to set aside their enmity over the missile shield and other irritants and join forces to find ways of containing Iran's nuclear program.


The scientists presented their report to Russian Foreign Minister Sergey Lavrov and U.S. National Security Adviser James Jones three months ago, and despite a deterioration in relations "not seen in decades," it received a positive reception providing "the basis for hope that both countries will be able to develop constructive policies of co-operation in addressing existing nuclear and missile threats."


Their report said the April 1, 2009, meeting between Obama and Russian President Dmitry Medvedev raised hope for a new beginning when the two leaders pledged to work together to reduce their nuclear weapons stockpiles.


A separate report prepared for the U.S. Air Force by the RAND Corporation, also released Tuesday, called on the United States to lower the tone of its hostile rhetoric towards Iran and consider embracing Russia.


"Over the years, the United States has attempted a variety of approaches to address the Iranian challenge. To date, none has succeeded," said the RAND report.


"We suggest leveraging international pressure while unilaterally de-escalating U.S. rhetoric and policy toward Iran (essentially, reversing the traditional good cop/bad cop roles)."


Support from Russia and China "is critical because it helps deprive the Iranian leadership of the ability to deflect domestic critique by focusing discontent solely on the United States and the United Kingdom or other European Union powers."


But the RAND report was less optimistic about the prospects of engaging with Russia or China, saying the likelihood of their continued support of the U.S. "remains questionable."


The Iranian nuclear question was front and centre when Israeli Prime Minister Benjamin Netanyahu visited the White House on Monday.


Obama has reached out to Tehran's ruling clerics, but Netanyahu wanted to push the U.S. president to give Iran only a few months to respond to his overtures on the nuclear issue.


Bristling at the suggestion of one Israeli reporter that reaching out to Iran suggested a sign of weakness, Obama said he would not accept an "artificial deadline" in his dealings with Iran, but that the U.S. remained steadfastly opposed to the country getting a nuclear weapon.


On Tuesday, U.S. and Russian officials began negotiations aimed at replacing the 1991 Strategic Arms Reduction Treaty, which expires in December.


But Lavrov warned that the new arms talks would not be easily separated from Russian concerns over the proposed U.S. missile shield.


"We believe that the START treaty cannot be discussed in a vacuum."