U.S. Firms to Ship Soviets Billions of Cigarettes : Trade: The deals represent big business for Philip Morris and R. J. Reynolds Tobacco. Shortages in the country spawned summer protests.

Two big U.S. tobacco firms announced Thursday that they will supply billions of cigarettes to the Soviet Union, capitalizing on a shortage causing political turmoil in that country.

Financial details were not disclosed, but the deals represent significant new business for suppliers Philip Morris and R. J. Reynolds Tobacco.

The companies have been emphasizing sales to foreign countries as the U.S. tobacco market has given ground to anti-smoking campaigns.

For the Soviets, the new shipments will help ease a domestic crisis that has caused unhappy smokers to protest in the streets of many cities this summer.

Philip Morris said the deal was the single biggest cigarette export order in the tobacco company’s history.

Marlboro and other well-known Philip Morris brands will be part of the order that will amount to more than 20 billion cigarettes by the end of next year. Shipments by Philip Morris International Inc., a division of New York-based Philip Morris Cos., will start at the end of this month.

Separately, R. J. Reynolds Tobacco International Inc., a Winston-Salem, N.C.-based subsidiary of RJR Nabisco Inc., said it signed an agreement to ship 14 billion cigarettes to the Soviet Union.

Delivery of Winston and other company brands is expected to begin next month and conclude by September, 1991, the company said.

Both companies also said they will have continuing involvement with the Soviet tobacco industry.

Philip Morris said it has an agreement to supply additional quantities of cigarettes from 1992 to 1995. Under another agreement, it will help Soviet agencies develop their domestic cigarette industry.

Similarly, R. J. Reynolds noted that it previously announced it would participate in a joint venture operation with the Uritsky cigarette factory in Leningrad.

Financial details of the deals were sketchy. John Dollisson, a vice president at Philip Morris, said the company will be paid in hard currency and in counter trade items, which he declined to specify.

He said Philip Morris had been in negotiations for “quite some time to get our products into the Soviet Union.”

The U.S. cigarettes sold in the Soviet Union are expected to be priced at a premium to the domestically made brands. Currently, American cigarettes are sold on a limited basis in that country, with sales restricted to duty-free outlets and stores that accept only hard currency.

The shortage of cigarettes became so severe in the country this summer that rationing was imposed in Moscow, where jars of used butts were being sold on street corners for as much as $16.

Shortages of bread and cigarettes earlier this month prompted the mayor of Moscow to join a growing chorus of other politicians demanding the resignation of Soviet Premier Nikolai Ryzhkov.

The shortages have turned up the heat on the Soviet Union’s central government, which has been criticized for economic mismanagement. Poor Soviet tobacco harvests also have been blamed for the shortage.