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. Last Updated: 07/27/2016

Ostankino Blocks Ads As Source of 'Irritation'

The state television station Ostankino announced Monday that it would no longer show advertisements, as other television companies protested a new ban on tobacco and alcohol advertising, saying they could lose millions of dollars worth of business as a result.

An announcer on the main evening news read out a statement from Ostankino directors saying advertisements had recently "been the source of great irritation and disappointment," Reuters reported.

"Therefore we have taken the decision to stop broadcasting commercial advertisements until strict rules are set up to regulate advertisements in the interests of the economic development of society and ethical standards."

The statement did not say when the ban would come into effect or how Ostankino would make up the huge loss of income such a step would entail.

The surprise decision came just days after President Boris Yeltsin issued a decree that bans all alcohol and tobacco advertisements in the mass media, although it makes no mention of other types of advertising, like street posters or direct mail.

Television companies and advertisers condemned the move as excessively strict Monday.

"Our agency will lose 20 to 25 percent in revenues as a result of the ban," said Sergei Kovalenko, head of Agenstvo RTR, the advertising branch of state-run Russian Television. "If the ban is enforced, Russian Television will be cornered in terms of money, since it has not received any funds from the budget this year."

"Many millions of dollars in investment that used to come from the West will simply stay where they are," said Sergei Vasilyev, deputy president of the advertising agency Video International.

The Russian Association of Advertising Agencies released calculations earlier this year which showed that banning the advertisements would cost Russia almost $1 billion in investment and tax revenues over the next five years.

The decree -- effective Tuesday -- demands that a law passed 18 months ago by the old Supreme Soviet, banning all alcohol and tobacco advertising in any form, be obeyed until a new law on advertising has been passed.

But advertisers said the new decree was short on specifics and left the industry some room for maneuver. Vasilyev pointed out one line in the decree which bans tobacco and alcohol advertising "conflicting with the interests health protection of citizens."

"How do you determine which commercials conflict with those interests and which don't?" he asked.

Sergei Piskaryov, deputy director of the Moscow office of the advertising agency D'Arcy Masius Benton & Bowles, said his company was considering the option of transferring tobacco and alcohol advertising to street posters -- which are not mentioned by the decree -- from television to avoid breaking the law.

Vasilyev also noted that Yeltsin's decree contradicts an existing law on the mass media, which permits advertising of any item that is legal to produce. "Consequently, we can choose the law to obey," he said.

Natalya Fonaryova, deputy head of the State Antitrust Committee, which among its other tasks serves as a watchdog for the advertising industry, said she was baffled as to why Yeltsin had passed such a decree.

The State Duma is due to choose between three versions of a draft law on advertising next week, only the most extreme of which would ban tobacco and alcohol advertising completely. Others would only restrict the hours and programs of such advertising. "I do not understand why it is necessary to single out the mass media while other advertisers are not affected," Fonaryova said.