A sensation was caused by the spokesman for Philip Morris Russia, Kuban Robert May, at the general meeting of the Russian tobacco trade association Tabakprom held 14 July who announced the company board’s decision to withdraw from the organisation which represents the majority of Russian tobacco makers.

The issue is to be considered by the shareholders’ extraordinary meeting convened in a month’s time especially for the purpose. PM’s management explained the move with lack of support of the company’s interests on behalf of Tabakprom, with the excise issue being the biggest stumbling block. The association direсtor general Vassily Terevtsov commented that PM’s decision had been expected, as the State Duma  had left intact the mixed taxation regime that was strongly opposed by manufacturers of quality cigarettes, PM and JTI above all. At the same time, Tabakprom, according to most observers, had been representing the interests of BAT and local manufacturers primarily, separate opinion of both PM and JTI persistently left aside. Responding to the PM demarche, a spokesman for Tabakprom noted that the decision was likely to jeopardise the company’s future business in Russia and brazenly said that it was common practice for the Russian tax authorities to turn to the association for advice on which company to inspect next. (vt)