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Russia's two largest phone retailers Yevroset and Dixis will no longer buy electronic goods from Russian distributors in an attempt to crack down on smugglers.

According to Russian news reports, the country is swamped with illegally imported cell phones, which avoid a customs tax of 5 per cent. The International Confederation of Consumer Protection Organisations believe these phones- including Nokia and SonyEricsson models - account for approximately 90 per cent of the country's mobile phone market.

In August Russian police seized about 300 tons of cellular phones and components worth more than $10m. Five companies who apparently front for the smugglers are under investigation. Prices on the market have gone up dramatically after the crackdown.

Cutting out intermediaries is the optimal move right now, a Dixis spokeswoman told the Moscow Times. More than 24 million mobile phones were sold in Russia last year, with a retail value of €3bn.

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