Stoli Vodka files for bankruptcy after cyberattack, legal feud with Russia
The maker of Stolichnaya vodka has filed for bankruptcy following a crippling cyber attack in September and an ongoing legal feud with Russia over who owns the brand.
The Stoli Group USA filed for Chapter 11 in US Bankruptcy Court in Dallas last week after a “malicious cyber-attack” forced the company to operate its global business manually “while the systems are rebuilt,” chief executive Chris Caldwell said in a statement.
Caldwell also cited ongoing legal battles with Russia, which named the company and its owner – Russian-born and exiled billionaire Yuri Shefler – “extremists groups working against Russia’s interests,” earlier this year.
Shefler has been exiled since 2002 because of his opposition to President Vladimir Putin.
After the Ukraine invasion in March 2022 Shefler changed the name of the company to Stoli from Stolichnaya.
At the time people around the world began dumping Russian vodka and spirits in protest.
“Today, we have made the decision to rebrand entirely as the name no longer represents our organization,” Shefler said in a statement at the time. “More than anything, I wish for ‘Stoli’ to represent peace in Europe and solidarity with Ukraine.”
The brand has long been promoted as a Russian vodka even though it’s made in Latvia. Stoli Group is a subsidiary of Luxembourg-based SPI Group, which owns other spirts and wines, including Kentucky Owl bourbon. Only Stoli Group USA and Kentucky Owl are in bankruptcy, the company said.
Shefler has been at odds with Putin for decades, publicly denouncing a number of draconian anti-gay laws in 2013.
Russia and Stoli Group have also clashed in courts.
The Russian government makes a state-owned version of the brand that is sold in the country with a label that clearly says it’s Russian made, according to reports.
Ownership of the brand is disputed between Shefler’s Stoli Group, and Sojuzplodoimport, a firm owned by the Russian state.
Stoli Group said its “experiencing financial difficulties” according to the filing, which lists between $50 and $100 million in liabilities.
The bankruptcy comes at a time when overall alcohol sales are slowing this year as consumers pull back on consumption to save money and for health reasons.
Consumption of spirits in the U.S. was down 3% and beer down 3.5% for the first seven months of 2024, according to IWSR, a global drinks data and analytics firm.
Younger people drink less than previous generations, according to reports, while non-alcoholic beverages are seen as a fast growing niche market.
The legalization of marijuana in many states has also contributed to lower alcohol sales, experts say.