Comment - Can SPI Group Unhook Stolichnaya From Gay Boycott Threat?
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.
If Scotch sales receive an end-of-year bump this month, there's a good chance it is from whisky executives toasting a banner year for the brown stuff....
The final just-drinks management briefing of the year takes a look back at the last 12 months in the global drinks industry. The penultimate chapter in this five-part briefing reviews 2013 for wine....
- AB InBev, SABMiller - Here's what'll happen next
- Is time right for TWE to move for Diageo's wines?
- Is Brown-Forman at the end of the SoCo road?
- Will a sexed-up SABMiller tempt AB InBev?
- Is Brown-Forman doing a Jack Daniel's in Ireland?
- AB InBev makes formal offer for SABMiller
- Diageo secures Xerox Corp CFO as finance head
- Tesco pulls several Carlsberg SKUs in UK
- Diageo makes US$780.5m beer deal with Heineken
- SABMiller formally rejects AB InBev's offer
- The IWSR Duty Free/Travel Retail Summary Report 2015
- Future growth opportunities for global spirits
- Global gin insights - market data, product innovation and consumer trends research
- Global non-Scotch whiskies insights - market forecasts, product innovation and consumer trends research
- Global Scotch whisky insights - market forecasts, product innovation and consumer trends research