Statement of Paul Clinton, President CEO, UDV North America Regarding Russian Government Actions Calling Russian Company's Ownership of Stolichnaya 'Illegal'.

Paul Clinton, President and CEO of UDV North America, made the following statement today:
"An influential Russian government agency has reportedly determined that ownership of the Stolichnaya vodka trademark was illegally transferred to the Russian company Soyuzplodimport. 'The fact of illegal privatization was established in course of the Audit Chamber's inquiry into the transforming of the All-Union External Trade Company Soyuzplodimport in a Joint-Stock Company.'

"According to the ITAR-TASS news organization, the Russian Federation Audit Chamber has recommended that the Russian government "reclaim the trademarks that belong to the state from illegal ownership of the closed Joint-Stock Company Soyuzplodimport."

"This development casts further doubt over the future of the Stolichnaya brand in light of earlier reports of widespread conflict in Russia over the Stolichnaya trademark and production facilities, including the armed invasion of a Mocow distillery where Stolichnaya is produced, the "arrest" of the trademark by Russian authorities, and the declaration of Stolichnaya as a compliance trademark, possibly opening the way for the export of competing "Stolichnaya" vodkas.

"According to ITAR-TASS, "The Audit Chamber's decision jeopardizes the results of an international tender for the right to distribute Stolichnaya in the U.S." made by Allied Domecq. Until this uncertainty is resolved, UDV North America will continue to work closely and cooperatively with U.S. distributors to minimize any supply disruption in the U.S. market as events unfold in Russia.
"The effect of the Russian government actions on the current distribution arrangements in the United States remains unclear. UDV will continue to follow these events within the Russian government and work closely with Russian government officials to explore every available option for distribution of the brand."

UDV North America, Inc., and Guinness Bass Import Company are the spirits, wine and beer divisions of Diageo plc in the USA and Canada (NYSE: DEO), one of the world's leading consumer brand companies. Key brands include Burger King, Johnnie Walker and J&B Scotch whiskies, Smirnoff vodka, Gordon's gin, Baileys cream liqueur and Guinness stout. The Diageo group operates in over 200 markets worldwide and has international sales of $17.3 billion. The company is also listed on the London (DGE) and Paris Stock Exchanges.