International News

Russian brands under pressure over Ukraine

CALLS FOR boycotts of Russian vodka following Russia’s invasion of Ukraine has seen product removed from many shelves around the world and prompted Stoli Group to clarify that it has no operations in Russia and announce plans for a rebrand.

In the US, some state-run liquor stores have been ordered to stop selling Russianmade vodka and distilled spirits, while some private businesses are following suit.

International news sites and social media show there has been confusion among consumers as to which vodka brands are made in Russia, and Stoli Group swiftly published a statement on its website condemning Russia’s actions in Ukraine and clarifying that its Stoli Premium and Elit vodkas are manufactured and bottled in Latvia. The company also said that while it does not have any operations in Russia, it does in Ukraine and across bordering countries.

Stoli Group has also announced it will rebrand and end use of the Stolichnaya name. “Stolichnaya” is a Russian adjective for “capital city”. Stoli Group said that in direct response to Russia’s invasion of Ukraine, the vodka will exclusively be sold and marketed as Stoli based on its founder’s vehement position on the Putin regime; Stoli employees’ determination to take action; and the desire to accurately represent Stoli’s roots in Latvia.

“While I have been exiled from Russia since 2000 due to my opposition to Putin, I have remained proud of the Stolichnaya brand,” commented Yuri Shefler, Founder, Stoli Group. “We have made the decision to rebrand entirely as the name no longer represents our organisation. More than anything, I wish for ‘Stoli’ to represent peace in Europe and solidarity with Ukraine.”

Since Shefler was exiled, Stoli Vodka’s production facilities have been located in Latvia where blending, charcoal column filtration, bottling, packaging and distribution are handled. Stoli says it will also engage exclusively with Slovakian sources to further ensure 100% non-Russian alpha grade spirit for its products.

Meanwhile, Heineken and Carlsberg have both announced that they will be exiting Russia. It follows both companies reviewing their operations in the country. Heineken says it will guarantee the salaries of its employees in Russia will be paid until the end of 2022 and it will not profit from any transfer of ownership.

Vodka brand Smirnoff has also been caught up in the debate. But while it had its origins in Russia, it is now owned by British spirits company Diageo and produced in a range of countries, not including Russia. It has also published a statement to that effect on its website.

Data analytics firm GlobalData says that sanctions, such as those in the US on Russian-made vodka and distilled spirits, damage brand recognition of Russian suppliers while offering a spotlight to other producers.

It says that while it is difficult to know what the long-term implications of the conflict are on the vodka market, as well as other commodities, if the situation escalates it may lead to an overhaul of European supply chains, creating more localised production in both Russia and the rest of Europe as companies pull out of the conflict zone, as well as increased trade to countries in Asia.