„The Best Vodka Brand in the World Is Being Held Back From Trading in Georgia“  - CEO of Stoli Group

„The Best Vodka Brand in the World Is Being Held Back From Trading in Georgia“  - CEO of Stoli Group

Stoli Vodka (formerly known as “Stolichnaya”) is one of the most famous Latvian premium spirits in the world. Stoli Group, which is represented in 176 markets around the world and is in active partnership with about 200 distribution companies, including the Georgian “Gagra Plus”, is owned by the Luxembourg-based global holding – SPI Group.

The SPI Group is owned by a Russian-born Jewish-British businessman, Yuri Scheffler, who opposed the government of President Vladimir Putin back in 2000 and decided to leave the Russian Federation for good.

It should be noted that a lawsuit has been filed between SPI Group and the Russian state-owned company FKP Soyuzplodoimport over the use of the “Stolichnaya” trademark. The dispute has lasted for more than 20 years and covers five continents, including Georgia.

Here is an interview with Stoli Group CEO, Damian McKinney for Forbes Georgia regarding developments in Georgia:

We’re talking about 176 markets, with more than 200 distributors worldwide, including Georgia. I know you are covering huge markets, but at the same time, you are presented in Georgia as well. What is Georgia as a country for the Stoli group? How are we positioned? Because it’s a small country. This is a very small internal market, but at the same time, in my understanding, very much valuable geopolitically. What is Georgia for the Stoli group and its CEO?

In a sense, it’s similar to the way the whole company feels. You know, we have a purpose that says “dream big, play bigger, and you will achieve the unachievable”. The big market doesn’t necessarily mean right or the best. So you could argue why Georgia? Well, I’ll tell you why Georgia.

Firstly, it’s a very important market for us because consumers understand. The consumer understands what the best vodka tastes like and they’re discerning.

Secondly, it’s a market where we have an amazing distributor. A powerful word for me was that not only do we have brands that cut through with the consumer, do we have a great culture? But importantly, do we have the most amazing distributor partners who share a dream and who share the ability to bring something amazing to the table? And we have that here as well. So imagine the combination – we have a great distributor, and I also have a team. Imagine putting those together? That’s a hell of a cocktail if you don’t mind me saying.

How are the brand and all the products doing here? Are there any global consequences or problematic things happening with the local business climate or business operations?

Look, it’s a great question, and this is about visible leadership. It’s about being here. It’s about recognizing what’s important. I’m here because I’ll be really honest with you, I’m frustrated. I’m here because it’s important and I’m here because I don’t understand how a brand like Stoli, which in 1997 was the trademark, was bought legitimately on the open market using PwC. In 2000, we had to seek a haven in Latvia, because it was very clear that Putin did not like the idea of the success that Stoli was achieving, and he wanted an alternative approach to it. What I don’t understand, therefore, is how here we are standing in Georgia, how a legitimately acquired brand with a legitimate trademark can somehow be told not to trade for some legal reason. So right now we are being held back.

Secondly, I don’t understand why the brand that frankly the consumers want because it is the best quality and, yes, has a special recipe, is being held back. They want to drink the best.

And thirdly, Stoli has shown that it stands for what it believes in actually creating a better world. Particularly given the history of Georgia as well, I don’t understand why we’re being held back. I’ve come here to both see it with my own eyes, spend time with the team to reassure them, and frankly, thank you for the opportunity, in a sense, to make my case to say – please, put us back on the shelves.

So did I get you correctly? Litigation and disputes still go on.

It’s still going on here, in Georgia. Right now we are in an appealing situation. My understanding is we’ve won the appeal at the higher court, but at the lower court, we are still being held off the shelves. We’re not allowed to discuss it.

You mentioned FKP, which is a Russian agency, 100% owned by the government.

Absolutely. So here we are as a legitimate entrepreneurial business, wanting to go about our legitimate right being held back by a government-sponsored agency. I don’t understand it.

Is this just happening in Georgia or is it a global problem?

No, you’re exactly right. Ever since the 2000 moment when frankly, my reading of all of this from Putin is: either you’re in or you’re out. And in the case of Shefler, he said: “I’m out, I am not going to participate in corruption”. And so he saw this very early on.

He did.

And since then, we have been out. We were referred to as the resistance, in a sense, we’ve been fighting as resistance against this, probably, below the radar, because nobody was paying that much attention over the years.

After all, it’s very easy for people to just ignore it. So we’ve been fighting this. And so when the invasion occurred on the 24th of February, for me, it was very clear – we were the resistance, we’ve been fighting. We’re going to come out now and be open and let you know who we are. And in a sense, this is touching on the old trademark challenges we’ve had. And we’ve had them around the world. And again, from a logical point of view, we’ve often stood back and said, but why is this being allowed to happen? Well, it’s politics.

It is.

And I’m not a politician, and never will be.

In a conclusion for this part of our conversation, the Stoli group is disputing within the core system in Georgia and worldwide with the Russian government. Am I right?

That is correct.

And that’s legal.

Correct. That is legally correct. Well, that’s through FKP, but legally correct.

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