RJR in the U.S.S.R.

• Position: RJR Nabisco Inc.

RJR in the U.S.S.R.

Each Friday night, a horde of rowdy Helsinki shipyard workers descends on Leningrad by way of a ferry ride from Finland. Each man brings one carton of American cigarettes to trade for vodka and the services of a Russian prostitute. Later, drunk and content, the men sleep all the way home.

People in Leningrad have a name for these Friday-night visitors. They call them "Winstons."

In Moscow this September, at a subway stop within sight of the Kremlin's red star, a young boy was selling a milk can full of cigarette butts. The price, he said, was five rubles. Where did he get the butts?

"My father's ash tray," he replied.

He squinted at his customer a moment. You could almost hear the gears turning in his head as he sized up the situation. Had he made a mistake by revealing where he got the butts? Was his customer ready to bolt?

"OK," he said finally. "Three rubles."

The U.S.S.R. is a nation of smokers. Here, nicotine-starved citizens rioted over a summer-long cigarette shortage, brought on by tight domestic tobacco supplies and the closing of Soviet plants for repairs. Things got so bad, in fact, that in September the U.S.S.R. decided to spend its precious hard currency to purchase 34 billion cigarettes: 20 billion from New York-based Philip Morris, 14 billion from RJR Nabisco. In terms of market potential, it is a cigarette maker's dream.

Last May, six months before the first riots hit Kuybyshev, Leningrad, Kiev and even upscale Moscow, RJR Nabisco, parent of Winston-Salem-based R.J. Reynolds Tobacco Co., came up with a proposal that would allow it to enter the country in a big way.

The company submitted a plan to the State Commission for Foodstuffs, Purchases and Procurement to retool a Leningrad cigarette factory. The Uritsky plant would spew out about 8,000 cigarettes per minute, starting in 1991. (Reynolds' Tobaccoville plant rolls some 480 million a day, on three shifts - nearly 330,000 a minute.) The cigarettes would be sold for rubles in the U.S.S.R. under the brand name Winston - as well-known there as that of Chevrolet.

But summer came and went, and RJR made little progress. Anxious to keep a lid on the deal until it is final, the tobacco company has had previous little to say on the subject.

This tight-lipped attitude is standard for U.S. companies negotiating deals in the Soviet Union. Many want to protect critical contracts - pampered over months of unbearably tedious meetings - from competitors who might try to horn in. And they don't want to talk too much about plans that could easily go awry.

It's not impossible that RJR would simply back out, waiting until the ruble becomes convertible, until critical privatization laws are passed and until Soviet President Mikhail Gorbachev brings the...