Stolichnaya and the Russian Government

Stolichnaya is one of the most popular vodkas in the United States. For quite a few people Stoli is the self-imposed well vodka because it offers the best bang for the buck at clubs. You may not know that Stolichnaya is a very important brand to Russia with ties to the first state-owned distillery.

Stolichnaya was a state-owned brand when the USSR existed. In the 1970s, the value of the Stoli brand was proven when PepsiCo was granted exportation and marketing rights in exchange for the opportunity to import and market Pepsi. This was the first time a foreign product was sanctioned by the USSR.

The state ownership became an issue when the Soviet Union collapsed. With no governing body to regulate use of the brand, many ex-USSR states continued to produce vodka as Stolichnaya. According to Russia, the brand was stolen from them during the tumultuous period when documents were forged transferring rights to the brand to a private company.

In the early 1990’s, a judge denied “the Soviet agency’s” right to use the Stolichnaya name in Russia. In the US, a law suit by two companies (Financial Matters Inc. and Classic Marketing) which claimed to have made a deal to market in the US with some other post-USSR maker of Stolichnaya was rejected that attempted to overturn PepsiCo’s exclusive right to the brand in the US.

It wasn’t until 2002 that the Russian government got the Stolichnaya brand rights from SPI in Russia.

At least according to Wikipedia. Things haven’t gotten much better for Russia since. In order to get the rights elsewhere in the world, the ownership of the brand has to be challenged in each of the approximately 100 countries where the vodka is sold. A dark and deadly tale has unfolded surrounding Russia’s efforts to get Stolichnaya back, complete with murdered businessmen and quite a few tangled court cases involving various mixes of Russia, SPI, Spirits International, Diageo, and more.

The Age updates the ongoing saga as many cases are on hold until May 20th to allow for settlement talks, hopefully resolving all of the cases at once. The Age attempts to fill in more detail on this convoluted story that, I must admit, I’m having a hard time making much sense of.

Robert Brodrecht

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