Stolichnaya

Stolichnaya (, also known as Stoli) is a vodka made of wheat and rye grain. A well-known Soviet brand, since the dissolution of the Soviet Union the ownership of Stolichnaya has been disputed between the Russian state-owned company FKP Soyuzplodoimport and SPI Group, a private company founded and owned by Russian billionaire Yuri Shefler.
Production process.
Fermentation of Stolichnaya starts with wheat and rye grains and artesian water, and takes about 60 hours. Once fermentation is complete, the resulting liquid is distilled three times, to a strength of 96.4% alcohol by volume. That spirit is diluted to bottling strength using more artesian well water. It is then filtered through quartz, sand, activated charcoal and, finally, through cloth.
The Russian state-owned version Stolichnaya is bottled from artesian water from the Russian city of Samara and in the ITAR Distillery, located in the Kaliningrad region, within the limits of a license granted by the state-owned FKP Союзплодоимпорт (transliterated Sojuzplodoimport or Soyuzplodoimport).
SPI, the company controlled by Yuri Shefler, produces Stolichnaya in Latvia at Latvijas Balzams, using Latvian water but alcohol from a distillery in Tambov, Russia.
Name and logo.
Stolichnaya is pronounced in Russian . The word is the adjectival form of столица, meaning "capital city".
The Soyuzplodoimport bottle label features the words "Stolichnaya vodka" in gold cursive script over a drawing of a Moscow landmark, the recently rebuilt Hotel Moskva.
The SPI Group uses a similar bottle, on which the label reads: Premium Vodka, produced and bottled in Latvia at the Latvijas Balzams plant for SPI Group and is labeled as Imported Premium Vodka.
History.
Stolichnaya has its origins in the Moscow State Wine Warehouse No. 1 which was opened in 1901 by the authorities to ensure higher quality vodka production.
There is confusion about the actual birth date of Stolichnaya vodka. The earliest confirmed production date is 1948, but the label design clearly predates 1946. It is likely that it was created by V. G. Svirida around 1944. However, there is a trademark registration dated 1938, which is sometimes quoted as another birth date.
In 1953, Stolichnaya was introduced at the international trade show in Bern and received a gold medal. Before the dissolution of the Soviet Union, the product was made in Ukraine for export.
In 1972, the PepsiCo company struck a barter agreement with the government of the Soviet Union, in which PepsiCo was granted exportation and Western marketing rights to Stolichnaya vodka, in exchange for importation and Soviet marketing of Pepsi-Cola. This exchange led to Pepsi-Cola being the first American consumer product to be produced, marketed and sold in the U.S.S.R. Directly after the dissolution of the Soviet Union, Stolichnaya vodka continued to be produced for export in several of the ex-Soviet republics, including Ukraine. The bottles retained their Soviet-era labels.
During the dissolution of the Soviet Union, steps were taken to transform state-owned Stolichnaya producer VO Sojuzplodoimport (later VVO Sojuzplodoimport) into a privately held company. Since the early nineties, the personnel of the vodka factory and control of the trademarks had been managed by VAO Sojuzplodoimport (later: VZAO Sojuzplodoimport). In 1997, they were transferred to ZAO Sojuzplodimport which, in turn, sold them to the SPI (Spirits) group in 1999.
The SPI Group is a private company chartered in Luxembourg, founded and owned by Russian billionaire Yuri Shefler, that distributes a wide variety of Russian spirits, having purchased a number of former Soviet brands and operations. While FKP produces in Kaliningrad, Russia (for the Russian market and the Benelux market), SPI Group distributes and produces from Latvia. State-owned company FKP Sojuzplodoimport and the SPI group have been in dispute over the ownership of various trademarks since 2003.
Trademark ownership and production rights.
Since 2003, after the dissolution of the Soviet Union, the Stolichnaya trademark has been the subject of dispute between distributors, predominantly the SPI Group and Russian state-owned Sojuzplodoimport. The SPI group has held the rights from the legal successor as a result of a privatisation, while the Russian government holds that the privatisation has never been fully effected.
Russia.
In August 1991, the Soviet patent office revoked the Soviet state-owned company's right to use the Stolichnaya name in Russia. However, in 2002, a Moscow court ruled, on appeal, that as a result of the incomplete privatisation, the Government of Russia should get back the rights to the Stolichnaya brand name from SPI Group since SPI had not obtained the rights from the legal holder. An appeal by SPI to the European Court of Human Rights was rejected.
Austria.
In 2014, the "Oberlandesgericht" Linz decided that FKP could not base its request on the nullity of the privatization/transformation, as that possibility had a term of limitation of 10 years according to the applicable law in Russia (if the term of limitation defense had been actively relied upon), and that thus FKP could not claim that SPI had not obtained the trademarks from the owner.
In 2020, the Austrian "Oberste Gerichtshof (OGH)" - the highest civil court in Austria - upheld the 2014 decision. SPI has therefore exhausted all options in the Austrian justice system.
Benelux.
In the Benelux countries, SPI has been the distributor, but use of the trademarks was challenged in 2006 by the Russian state-owned company FKP Sojuzplodoimport. In 2015, a Dutch court held that, according to Russian and Soviet Union law (and a term of limitation had not been invoked regarding the transfer), the privatisation had not taken place, and that Benelux law and (when provisions were insufficient) Dutch law applied to the transfer of the trademarks. the court ruled that SPI had obtained the trademarks in bad faith from an entity that wasn't the legitimate owner. The trademarks should be transferred back to FKP Sojuzplodoimport and SPI could not use the term "Russian" on its vodka.
After the verdict, SPI stopped distribution of Stolichnaya and started selling "Stoli" with the motto "Same Vodka. Different label". That was forbidden by a Dutch judge in July 2015, on the grounds that it infringed the rights of FKP Sojuzplodoimport. FKP Sojuzplodoimport planned to start selling Stolichnaya in the Netherlands on 1 September 2015.
Other European states.
SPI Group holds the rights to several Stolichnaya trademarks in the United Kingdom, Ireland, Italy, Denmark, Portugal, Czech Republic, Spain, Cyprus, Poland, Norway and Iceland. In a lawsuit before the Court of The Hague, FKP Sojuzplodoimport sought an order to have the trademarks returned to it from several SPI companies. The Hague court assumed jurisdiction based on two Brussels Regime instruments: Brussels Regulation 44/2001 (for the EU countries) and the 2007 Lugano Convention (Norway, Iceland). It ruled that, because the dispute did not relate to trademark validity (for which national courts have jurisdiction) but to trademark registration, it did have jurisdiction, because a main defendant was located in the Netherlands. To evaluate the validity of the trademarks it would use the national law of the trademarks concerned.
United States.
PepsiCo had been the distributor of Stolichnaya based on an agreement with the Soviet Government. The change in control of the trademarks and production facilities led to several lawsuits over which company could market vodka under the Stolichnaya name in the United States. On November 20, 1992, a US federal judge ruled that PepsiCo could maintain the exclusive right to the name in the United States, because allowing others to market under the name would bring a "risk of irreparable harm" to the trademark.
In 2009, William Grant & Sons signed an agreement with SPI Group to distribute Stolichnaya in the United States, taking over from PepsiCo. The William Grant & Sons distribution contract expired on December 31, 2013 and was not renewed, due to the desire of the SPI Group to manage its brand directly.
In 2006, FKP Sojuzplodoimport brought an action against the owner of the mark Spirits International N.V., et al. in 2005. The district court dismissed almost all claims on a motion to dismiss, holding that the incontestable status of the registration meant that FKP Sojuzplodoimport couldn’t challenge ownership. However, in 2009, the Court of Appeals for the Second Circuit negated that decision, stating that FKP Sojuzplodoimport could challenge the validity of the assignment of the trademark.
In 2011, after examining the grant given to FKP Sojuzplodoimport by the Russian government, the district court held, and the appeals court affirmed in 2013, that the Russian government had not transferred full ownership of the marks to FKP Sojuzplodoimport, so FKP Sojuzplodoimport wasn’t the registrant of the mark. Since FTE had dismissed all claims except for infringement of a registered mark, it did not have standing and the case was dismissed.
FKP Sojuzplodoimport and the Russian government then signed a new document that assigned the trademarks to FKP Sojuzplodoimport in every way possible, and FKP Sojuzplodoimport filed a new lawsuit against Spirits International N.V. In 2014, the district court heard testimony from experts on Russian law and reached the conclusion that, under Russian law, FKP Sojuzplodoimport could only manage property, not own it and, therefore, FKP Sojuzplodoimport did not have standing. However, in 2016, that decision was vacated by the Court of Appeals and the case went back to the district court.
Varieties.
Stolichnaya is available in many varieties, including:
Several of these offerings have performed well at international spirit ratings competitions. For example, the Elit label was awarded a silver medal at the 2011 San Francisco World Spirits Competition.
Marketing.
Stolichnaya's chief rival Russian Standard aroused controversy when it questioned Stolichnaya's Russian authenticity, due to the elongated distribution and ownership chain. Pernod Ricard responded by insisting that it is an authentic Russian vodka, because nothing is added or removed during the bottling.
In Eminem's 2010 music video for "Love the Way You Lie", Stolichnaya vodka was included in several scenes. The product placement begas with actor Dominic Monaghan shoplifting a bottle of the vodka, after which he and actress Megan Fox drank from it on the roof of the liquor store. In the movie "Sleeping with the Enemy", the brand makes a brief appearance when Mr. Burney grabs a CD.
Stolichnaya also advertises heavily during televised New York Yankees games, using digital banners behind home plate.
Roger Sterling, a main character in the American television series "Mad Men", is also a fan of Stolichnaya, keeping a bottle in his office at all times. This habit appears to be either specially facilitated or anachronistic, however, since the series takes place in New York City in the 1960s, roughly a decade before the vodka gained its first official US distribution through PepsiCo (see above).
Boycott.
In July 2013, columnist Dan Savage joined gay bars and clubs and called for a boycott of Stolichnaya and other Russian vodkas. The boycott is in response to anti-gay laws enacted by the Russian government.
In response, SPI released a statement expressing their opposition to Russia's anti-gay policies, stating that, "Stolichnaya Vodka has always been, and continues to be, a fervent supporter and friend to the LGBT community."
SPI have released additional statements "announced that in response to the boycott the company would be making a financial donation to an unspecified group working on behalf of Russian LGBT activists fighting against the Russian government’s anti-gay policies." The CEO of the company also insisted that the company is "not a Russian company", even though "the company operates a distillery in Russia, that several hundred of its 2,500 employees are in Russia and that it obtains its ingredients from Russia."