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Srbija 2020

Killing & remembering Zoran Djindjic: a loose tobacco conspiracy

Wednesday will mark the fourth anniversary of the reported attempt to kill Serbian prime minister Zoran Djindjic on the road to Surcin airport. The failure of the authorities to properly detain and question the driver of the truck – Dejan “Bugsy” Milenkovic – was symptomatic of a string of – and I use the term loosely here – intelligence failures - leading up to the actual murder on 12 March 2003. Bugsy’s premature release from custody gave ammunition to people close to – and I use the term loosely here – intelligence services – who, after the Djindjic murder busied themselves by alleging the other faction did it. 

One of the stories floating around these groups was that Djindjic’s assassination was somehow connected to Serbia’s upcoming – and most lucrative – privatization deal to date: the sale of the tobacco factories at Nis and Vranje.  These were eventually sold to Philip Morris and British American Tobacco (BAT).  While there is no evidence that I’m aware of to support such an outlandish theory, what did become clear from talking to people around the privatization deal was the intimate involvement of – and I use the term loosely here – diplomats - from the U.S. and U.K. These diplomats attended meetings with Serbian government officials to discuss the privatization, and openly lobbied in favour of Phillip Morris and BAT.

Four years on, and plus ca change.  This time it is a respected and high-ranking U.S diplomat - the U.S Ambassador to Serbia himself no less - who on Monday issued a statement on behalf of Phillip Morris’s interests, telling the Serbian government that they had better “find a solution to the problem” that Phillip Morris is facing. What makes this case somewhat interesting is the fact that Phillip Morris's "problem” is a rules-based regional trade treaty designed to hasten movement along the yellow brick road leading to EU membership. The “problem” is the Central European Free Trade Agreement (CEFTA) which stipulates that, among other things, custom tariffs and import/export taxes have to be harmonised. 

CEFTA is viewed as a good thing by many economists as an element in Serbia’s transition to that of a free-trading liberal democracy, part of a wider regional economic area, too busy engaging in seamless free-trade to bother too much about emotive issues like Kosovo and the alike. Thus one would think that the economic liberalization principles of CEFTA would be warmly welcomed by the U.S embassy and indeed, over the years U.S government agencies and associated NGOs in Serbia have spent millions in tax dollars promoting such principles as part of their democratisation programs.  

Unfortunately the CEFTA free trade arrangement threatens Phillip Morris’s interests because, among other things, they will lose a protective import tax that made buying the factory so worthwhile in the first place. Clearly, the U.S Ambassador’s very public call to “solve the problem” that the tax abolition would cause is in no way influenced by the fact that this multinational company paid millions in campaign contributions to the party of the President who sent Mr. Polt to Belgrade in the first place.   

The fact that Phillip Morris employs – and I use this term here loosely – former intelligence officials – who once worked for the self-same U.S government has no bearing here. Such thinking would be far too cynical, no, the Ambassador is merely doing his job as a diplomat - Phillip Morris is a U.S company and the embassy is charged with representing U.S commercial interests in Serbia. Nevertheless, over the past 15 years, voters throughout the U.S and the EU have elected politicians on platforms which have dramatically curbed the influence of the tobacco multinationals. Thus it might seem strange to some that U.S diplomats are attempting to buck this democratic, consumer-orientated trend beyond the shores of the United States to ensure that one company's deadly product can be sold at the lowest price possible to as many as possible for as long as possible.

Others with longer memories may recall that it was precisely because of such democratic, consumer-orientated trends in the U.S and the EU that forced the tobacco multinationals to seek new markets in 1990s, new markets in what we will charitably call less-regulated regions, like the Balkans, where hundreds of thousands of tons of Phillip Morris and BAT product mysteriously found their way into and out of the region, despite the crippling sanctions which helped pauperise a generation. They might also recall that according to some very detailed investigations, such activities enriched networks associated with nearly all the U.S's strategic adversaries between Italy and North Korea, with the possible exception of the Taliban. They might also recall that although the tables are now turned - Phillip Morris is threatened by CEFTA, a step toward the EU - the EU has, in the past, felt threatened by Big Tobacco.  

Threatened to such an extent over tax issues that ten years ago, intelligence-led cross-border customs investigations were initiated throughout the EU. These in turn led to inconvenient law suits in the United States and all sorts of revelations.  One of these law suits was dropped when by strange coincidence Phillip Morris agreed to “anti-smuggling measures” and the payment of up to 1.25 billion euros to the EU while stressing absolutely no connections to tobacco smuggling in the Balkans whatsoever.


Phillip Morris has linked the tax issue to jobs at the Nis plant, which cynics might regard as some kind of implied threat, were it not for Phillip Morris's reputation as one of the most ethical companies in the world.


For their part, U.S diplomats in Belgrade might like to reflect on past history here, and whether the disparity between what has been preached and practiced of late may engender further local cynicism which in turn stimulates the inat upon which their declared adversaries, the Radicals, suckle. 

 And the majority of Serbia’s politicians, currently so publicly committed to maintaining and strengthening the State of the Republic of Serbia might like to reflect on whether acquiescing to a multinational’s demand at the expense of a step towards that Safe European Home we all dream of for our children is really such a good idea. I like to think I know what Zoran would have done.  

finally some in-depth

on this issue that goes beyond 'Legija did it..period'
what woud, loosely, in your opinion be Djindjic's link to these muddy affairs. Do you think he played the wrong card in a high-stakes political-business poker game, trying to pull serbia out of the bog ASAP, or do you think his own motives were financial as well?

Cigarette prices

Increasing cigarette prices is without doubt the most effective way of reducing consumption. That said, I'd really like to see some data that compares the price of a pack of cigarettes in Serbia to the rest of the world, both actual price and also adjusted for purchasing power. I'm going to go out on a limb and say that probably only China has cheaper cigarettes :). Anyhow, it's beyond me why the special excise tax has remained in place for so long and the import duties so low.

All this aside, there are many more benefits in joining CEFTA that will offset any compensation to the tobacco companies for breaching the agreement. Philip Morris should point their lobbying to Croatia because it seems to me they are the problem in this case.

Wish it were true...

Increasing cigarette prices is without doubt the most effective way of reducing consumption.

Sadly, that's not the case. I'll draw your attention to Canada. When I went there in 1996, a pack of DuMaurier cost $2,20. Today, the same 20-smoke, flip-top pack costs $7,75. Has the consumption decreased? Not really.

In the 1996-2006 period, it has dropped only 10% (population 15-24 yrs old), whereas the price of a pack of smokes has gone up 350% and there's a province-wide (Ontario) ban on smoking, even in bars and coffee shops (since last year).

Then, the government came up with the idea to print ghastly photos on the cigarette packs (cancerous lungs, bleeding/rotting gums, yellow cavity-riddled teeth, etc). It doesn't quite work, either.

The best way to combat Big Tobacco, smoking and help our healthcare system is to close down all the factories. It's sort of too late now. Someone should've thought of it before PM/BAT got their claws on DIV, DIN...

Then, the government has to ban smoking in public places. Yeah, yeah, I know there's a law on it -- but nobody's enforcing it! You probably know about the incident at a RIK session where half the Electoral Commission was taped chain-smoking during one of the meetings.

The problem is that even if Serbia and its citizens were really serious about saying goodbye to smoking, they would face some serious opposition due to the vested interests of a certain group of people - as Mr. Griffiths has pointed out.

[ the figures given in this post are from Health Canada. their website is at ]

Good story, but no real facts

If you really knew the topic, you should have known that Djindjic hadn’t negotiated privatisation of DIV and DIN. In fact, he was trying to attract investitors for green field project. Therefore, the whole story is not supported with real facts.

Small size of market, low cigarettes cost, high taxes and excise duties can hardly make Serbia be attractive for big international Tobacco players. We should be realistic with our expectations and think twice what we can really offer as investment opportunity.

I don’t like conspiracy theories as they only provoke gossip and move a focus into wrong direction. Didn’t want to be rude, just to give another view and help people think out of the box. Hope you don’t mind.

Lotsa $$$

Small size of market, low cigarettes cost, high taxes and excise duties can hardly make Serbia be attractive for big international Tobacco players.

Dear Olivera,

No market is too small if one can profit from it. Serbs are tobacco junkies (I think we're right up there with Greece & Turkey). We smoke billions of cigarettes a year. Yes, Serbia has some 8 million inhabitants, but there are way too many smokers.

If 30% of the population (2.6 M) smokes (and that's a conservative estimate) 10 smokes a day (and this is even more conservative a number; I know people who smoke 2 packs a day), that's 26 million cigarettes a day, or 1.3 million packs. 39 million packs a month, 468 million a year. Small market? Even if PM's profit is $1 per pack, they make a cool $500,000,000 per year in Serbia alone. It's a sweet profit for a product most other countries have shunned.

As for the low cost of the product, PM and BAT are in Serbia for that very reason -- their smokes are cheaply produced in Serbia where the wages are a lot lower than in, say, Virginia. Plus, they are not bound by the same kind of labour & environmental laws and regulations that they have to go by back in the USA. Not to mention that they are forced by the (US) government to re-invest in the communities they operate in, run smoking prevention programmes and give money to a host of other causes. I highly doubt it that they do the same things in Serbia.

I haven't really looked into it, but they probably have received loads of incentives from our government on top of everything else that they don't have to do.

If you haven't seen "Thank You for Smoking", I highly recommend it.

milentivs pannonicvs


If 30% of the population (2.6 M) smokes (and that's a conservative estimate)

Conservative to say the least, the latest WHO stats I saw were giving us some 40% of habitual smokers (i.e. not including 'casual smokers') and that's according to estimates by health officials which are carried out every year amongst student and other population samples. That's down from some 50% around 2000 but we are still first in Europe and possibly in the world (WHO has incomplete data for other continents).

The best solution is to stop smoking, make it socially unacceptable, ostrasize the smokers, having lived in an antismoking environment for 17 years I think it's possible in Serbia too, just had a slava where I did not need an ashtray, and damn proud of it.

Quote:...make it socially

...make it socially unacceptable, ostrasize the smokers...

I agree that smoking should be fought tooth & nail, but I think there are far better ways to solve the problem (I've already mentioned closing down the existing factories, enforcing the laws, etc).

Why make it "socially unacceptable"? Why make the smokers feel like a bunch of lepers and vilify them? We wouldn't do that to drug addicts, alcoholics or people w/ HIV, would we?

We can protect the right of non-smokers to breathe "clean" air (*) without curbing the rights of smokers.


(*) ________

it always amazes me how nobody ever talks about industrial & other pollution when they jump at the smokers' throats. it's as if smoking causes every pulmonary disease ever suffered by the human race

Moj engleski nije tako

Moj engleski nije tako dobar...ali moram da kažem nešto - frapantno je koliko ljudi zanemaruju ili zaboravljaju činjenicu da je Tvornica Duhana Rovinj ostala kratkih rukava na ovom tržištu u vreme Djindjića....i bez kolike /?/ zarade su ostali ?
....Ne verujem da su bili srećni zbog toga /sa sve ekipom koja je imala žestoke interese u toj priči.../, ali mi je nekako upalo u oči, jako brzo po završetku "Sablje", a tokom predizborne kampanje za vanredne izbore - pojava popriličnog broja bilborda sa reklamom gorenavedene "firme"...koja se par godina pre toga uopšte ovde nije oglašavala...
Srdačan pozdrav/best regards

...ako neko misli da ovo što sam napisao ima smisla i vredi truda ...nek prevede domaćinu bloga

a fotorobot

Unforchunatly, Hank daznt spak eny Anglish so I will translatt:

It's shocking how many people go over the fact or forget the fact the "Tvornica Duhana Rovinj" (Rovigno Tobacco Factory) lost big time on the Serbian market during Djindjic's time... and how much profit they lost? ... I doubt they were happy because of that, them or the people that had big interests in that story, what I did notice, soon after the ending of "Sablja", during the local election campaign - the springing of a considerable number of billboards of the above-mentionned firm... which did not even advertise prior.

And the photorobot was later identified as a Croat military band musician (with a DB background) who just happened to have been in Serbia, for a day, the very one, Djindjic was assassinated...

malesevac, Hvala na


Hvala na trudu,zaista nisam ocekivao da ce se bilo ko pomuciti oko ovoga !!!
Hvala jos jednom i pozdrav

Thanks mr. Griffiths!

Thanks, we did not have enough conspiracy theories of our own, so it's really handy to get a few more from you as well!

big brother says NO

I guess it's pretty obvious how big brother wants it...profits, profits, profits. What ever happened to regional stability in the Balkans and the development of Serbia's market economy? As far as I know, the US wants Serbia in the EU, State Dep. officials have stressed this many times. Serbia's disobedience of its CEFTA obligations would not bring it any closer to meeting EU criteria.

Quote:As far as I know, the

As far as I know, the US wants Serbia in the EU, State Dep. officials have stressed this many times.

I know we're going way off topic now, but I am not so sure that they want a united Europe. They don't like competition. They don't like to be challenged on the world stage in any way, shape or form.

I wouldn't put much stock in their public/official statements. The CEFTA case is the perfect example. On the one hand, Polt is all for the rule of law & democracy; for a free, strong, capitalist and united Europe - yet on the other he's acting as a Phillip Morris spokesman and even threatens Belgrade. If we had any spine whatsoever, we'd have him tarred & feathered and sent back to Washington, the saw-toothed, lisping b*stard.

If we budge, then we don't deserve better than to live in a banana republic that gets b*tch-slapped whenever it attempts to show any self-respect or acts in accordance with its national interests (which CEFTA is).

I've studied US foreign policy for far too long to have any illusions about the way they do things. I don't take them at their word - ever. BTW, State Dep't is a rogue element within the US gov't. They've always been on a rather long leash. Given that State is full of Clintonistas, I was hoping Bush would sort them out. In vain, it turned out.

Milentivs Pannonicvs Cynicus

US and EU relations

There's been a substantial amount of controversy about the position of the US on EU formation. In fact, the US adamantly stressed the integration of European states subsequently after 1945 (for example, Churchill's iron curtain speech and Roosevelt's determination to create a military and economic union in Europe in order to counter Soviet influence and increase US exports to the region). The US wanted a stable and secure Europe. Today, however, the situation is quite different. I, personally, don't see the US as being against a strong and united Europe, both players share similar global political and economic interests. However, what is going on is a growing dissatisfaction in the EU with US unilateralism. The Commission advocates a multipolar world with multilateralism being the prominent ideology. The US doesn't fear the EU as a rising economic power since both partners share a common atlantic market. It just wants to remain the big kid on the block.