Andy Morton

Comment - Can SPI Group Unhook Stolichnaya From Gay Boycott Threat?

By | 26 July 2013

Russian vodka - or is it?

Russian vodka - or is it?

The gay community in the US has, understandably, reacted angrily to new laws in Russia that outlaw so-called “homosexual propaganda” and gay adoption. A number of gay bars in Chicago have stopped selling Stolichnaya vodka, while bloggers incensed with Russia's actions have called for a boycott of the brand; a popular spirit in gay nightspots in the country.

The only problem is that the Stolichnaya on sale in the US is not as Russian as the country's homosexuals believe it to be. Sensing a PR catastrophe, the head of SPI Group, which owns the international rights to Stoli, yesterday (25 July) wrote an open letter to the global LGBT community decrying the Russian Government's moves. 

Val Mendeleev was also at pains to point out that SPI is based in Luxembourg and bottles Stolichnaya in Latvia. “The Russian Government has no ownership interest or control over the Stoli brand,” Mendeleev said. You could, of course, argue that Mendeleev's claims are slightly disingenuous as Stolichnaya is made with 100% Russian ingredients and the brand's marketing makes ample use of its heritage in the country.

But, there is another reason why SPI would want to distance itself from the Russian Government - the pair are still in dispute with each other over the global rights to Stolichnaya. It is a complex tale, but it boils down to SPI acquiring Stolichnaya for an astonishingly low US$300,000 in 1997. 

A few years later, the Russian Government sought to get it back, claiming SPI had used the chaos of the country's immediate post-Soviet years to snap up Stolichnaya (and 42 other brands) for a knockdown fee.

The battle between the two proved so fierce that Russian authorities issued an arrest warrant for a major SPI shareholder.

As it stands now, Stolichnaya has the international rights to Stolichnaya while original owner Soyuzplodoimport maintains the Russian rights.

But, while Stolichnaya is trying to wriggle off the boycott hook, what of more-identifiably Russian vodka makers? Russian Standard last month finally took control of Central European Distribution Corporation and wasted no time in launching CEDC's Green Mark Vodka in the US.

Green Mark is Polish but its new association with Russian Standard would put it in danger of any boycott. That's not something any brand would seek, and could be especially damaging for one just starting out in a new territory.

Expert analysis

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Canadean's "Constellation Brands, Inc. : Consumer Packaged Goods - Company Profile, SWOT & Financial Report" contains in depth information and data about the company and its operations. The profile contains a company overview, key facts, major products and services, swot analysis, business description, company history, key competitors, financial analysis, mergers & acquisitions, recent developments, key employees, company locations and subsidiaries as well as employee biographies.

Sectors: Corporate social responsibility (CSR), Spirits

Companies: Stolichnaya, CEDC

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