Stolichnaya vodka with a taste from its Soviet days is proving hard to shake: Many drinkers and bartenders think it’s Russian.
Since Russia’s invasion of Ukraine, beverage sellers and retailers in the US, UK and other countries have boycotted Russian brands to protest Moscow’s aggression. Stolichnaya — although blended, filtered and bottled in Latvia by Luxembourg-based Stoli Group Sarl — has suffered some fallout.
Now, the brand is changing its name to Stoli from Stolichnaya as part of a broader campaign to inform consumers that it is not from Russia. It will also stop supplying ethanol from within the country.
The company said the rebranding was a “direct response to Russia’s invasion of Ukraine,” motivated by “the desire to accurately represent Stoli’s roots in Latvia.”
Given the delay in sales data, the company said it remains unclear whether the boycotts will affect revenue.
Stoli’s efforts to distance himself from Russia became urgent on Friday when the United States said it would seek to ban imports of goods from what President Biden called distinctively Russian industries, including the maritime industry. non-industrial products, vodka and diamonds.
Stolichnaya has a long and close history with Russia. In Soviet times, the brand was owned by VVO Soyuzplodoimport, a state-owned organization that controlled all exports of agricultural products from the Soviet Union. The company was privatized in 1992 as part of Russia’s transition to capitalism. Five years later, on the verge of bankruptcy, it sold its brands for about $300,000 to ZAO SPI, which later became part of SPI Group – owned by Russian businessman Yuri Shefler.
But in 2000, Russian authorities declared privatization illegal and said SPI paid too little for the brands. The following year, the government declared itself the rightful owner of the rights to Stolichnaya.
Since then, the Russian government and Mr Shefler’s Stoli Group have been fighting over the Stolichnaya trademark around the world, said Stoli CEO Damian McKinney.
Mr. McKinney said Stoli owns the trademark in about 150 countries, including the US, while the Russian government controls the trademark in Russia and the Netherlands.
Stolichnaya’s fortunes have declined over the past two decades. One of the top imported vodkas in the US in the early 2000s, it became the seventh-largest imported vodka by volume in 2021, according to IWSR. According to Mr. McKinney, the US still holds an important position, accounting for about 70% of the brand’s total global sales.
Stoli executives hope the rebranding will help separate vodka from Russia as well as boost sales. He said he has sent regular email updates to distributors explaining the history of the brand and making it clear its opposition to Russia’s invasion of Ukraine.
Stoli has posted several images on his Instagram account posing as a dove in the colors of the Ukrainian flag. This week’s email signatures of executives read “Stoli symbolizes liberation,” in blue and yellow, and “Stoli is proudly made in Latvia.”
Stolichnaya has been a political football between the US and Russia for decades. When a Soviet fighter jet shot down a Korean Airlines passenger jet in 1983, The Wall Street Journal reported that 15 countries had suspended the sale of souls.
In 2013, the hashtag #dumpstoli started trending on social media after Russia passed a bill banning the promotion of what it calls “gay propaganda”.
At the time, bottles of Stolichnaya were prominently labeled as “Russian Vodka”. While bottled in Latvia, the ethanol for the wine comes from Russia. Stoli stripped “Russian vodka” from the bottle and hired a public relations firm to promote the brand’s history, including that of Mr Shefler, who also holds British and Israeli citizenship. He said he had lived outside Russia since 2002 because of his opposition to Vladimir Putin.
Despite the label change, the brand has until recent days supplied 90% of its ethanol – made from wheat – from Russia, Mr. McKinney said. Currently, the company is sourcing ethanol from Slovakia, although the cost is about 10% higher, he said.
Other vodka brands, including Diageo PLC’s Smirnoff, are sometimes mistaken for Russian despite being produced elsewhere. Diageo recently released statements in the US and UK telling consumers that the Smirnoff, which is of Russian origin, is made domestically.
A series of US states including Oregon, North Carolina and Vermont recently banned the sale of Russian-made or owned alcohol to signal condemnation of Russia’s invasion of Ukraine. Vermont Republican Governor Phil Scott has told the state liquor commissioner to pull Russian-owned products from stores.
Although Stolichnaya is not considered a Russian-owned brand, some bars have removed it anyway.
Magic Mountain Ski Resort, owned by Ski Magic LLC, recently posted a video on Twitter showing a bartender pouring Stolichnaya down the drain. “Sorry, we don’t serve Russian products here,” he said.
Ski Magic President Geoff Hatheway said he thought Stolichnaya had benefited from its association with Russia and had “lowered ties with Latvia” until recently.
Hatheway notes that the brand’s label features a hotel in Moscow and that the name Stolichnaya is Russian — which roughly translates to “capital existence.” Meanwhile, information about Stoli’s Latvian production appears on the back label in a small form with a mention of the Tambov region of Russia, he added.
“They sell it on the basis of consumer understanding of it as the top Russian vodka,” said Mr. Hatheway. “Since it’s not a good thing after Russia invaded Ukraine, they are opportunistically cutting ties with all of that.”
The company says it is proud of its roots but has now created a completely non-Russian spirit and plans to change its label as part of a complete rebranding.
Mr. Hatheway said a new brand could encourage him to start serving Stoli again at Magic Mountain’s pub.
“Stolichnaya is the most famous Russian brand in the world,” he said. “If they really want to make it the best vodka from Latvia, they should put it on their front label.”
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https://www.wsj.com/articles/stoli-vodka-really-wants-you-to-know-it-isnt-from-russia-11647003622?mod=pls_whats_news_us_business_f Stoli Vodka Really Wants You To Know It’s Not From Russia