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BBC News Online: Business


Friday, 1 February, 2002, 08:47 GMT

Russia toasts Stolichnaya victory


Joanna Lumley partakes the Stoli
Stoli is the best selling vodka in the world
by BBC News Online's Alexander Koliandre

Russia has won back one of its most precious and famous assets, the Stolichnaya brand name, which one connoisseur, James Bond, once praised as Russia's best vodka.

And like Mr Bond, millions of other Stolichnaya drinkers have help to elevate it to the best selling vodka in the world, with sales totalling $2bn (£1.4bn) a year.

Now, a Moscow court has ruled that Stolichnaya, along with 42 other vodka brands, should be returned to the state, namely, to the Agricultural Ministry.

The decision ends a four-year long dispute between the ministry, which was responsible for every shot and bottle during the Soviet years, and a private company Soyuzplodimport (SPI).

SPI, which was once part of the Agriculture Ministry, is the main exporter of Russian vodka and an owner of many distilleries across the country.

Dubious purchase

The company purchased the right to use all the 43 brands for $300,000 in 1997.

James Bond
Ever since then the ministry has tried to recover them, claiming the company which had sold the rights to SPI was not the legal owner of the brands.

SPI says that in the time of the deal there was no doubt over who had taken ownership of the brands from the USSR government.

The Ministry disputes the legality of the sale and the price paid.

The government has valued the rights to use the most well-known brands - Stolichnaya and Moskovskaya - at $400m.

The decision might bring some joy to President Vladimir Putin, who has set up a special committee to return some well-known brands to the state.

But while the court deliberated, SPI continued to sell vodka in Russia and abroad, and it is still unclear how the brand names can now be used.

Tough business

Drinkers in Moscow
Russia's liquor industry was privatised and mostly deregulated in the early 1990s.

In a heavy drinking country like Russia, vodka is big business and a dangerous one.

The industry is considered as one of the most criminalized, with a history of dozens of contract killings and criminal cases.

Cheap, poor filtered and fake vodka has caused headaches for the state, producers and drinkers.

The outcome might yet leave the Russian government a little shaken or stirred.


Related to this story:
Adventure in Russia's wilderness (31 Dec 01 | From Our Own Correspondent) Russian tots amused by sots (28 Dec 01 | Europe) Russian tax foul-up threatens vodka (04 Jun 01 | Europe) Estonian vodka poisonings kill 58 (17 Sep 01 | Europe) Poland's top vodka brand for sale (27 Jul 01 | Business) Vodka wars in Moscow (04 Nov 00 | Europe) Russian police in vodka swoop (04 Aug 00 | Europe)


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