The manufacturer of Stoli vodka filed for bankruptcy. The decision only applies to the company's operations in the United States. As justification for its request, the company cited lower demand for spirits, a serious cyber attack that paralyzed its operations, and several years of fighting with Russia in court.
The company said in its bankruptcy filing that it was “experiencing financial difficulties” and had liabilities of between $50 million and $100 million. Stoli vodka and Kentucky Owl bourbon will continue to be available in stores while the company undergoes the restructuring process under Chapter 11 of U.S. bankruptcy law. Importantly, it only applies to its operations in the US.
Until 2022, Stoli was sold in the United States as Stolichnaya. The company shortened its name after Russia invaded Ukraine and boycotted Russian vodkas. Stoli Group's founder, Russian-born billionaire Yuri Shefler, was exiled from that country in 2000 because of his opposition to President Vladimir Putin.
Russian vodka from Latvia
As CNN notes, this drink has long been sold as Russian vodka, but its production plants have been located in Latvia for several decades. The Stoli Group is part of Luxembourg's SPI Group, which owns other spirits and wine brands.
“The Stoli Group has been a target of the Russian Federation since its founding almost 25 years ago,” Stoli Group CEO Chris Caldwell said in the statement. – At the beginning of this year, both the company and our owner were recognized by the Russian state as “extremist groups acting against Russia's interests,” he pointed out.
The ongoing legal battle with the Russian government has forced the Stoli group to “spend tens of millions of dollars in this long-term legal battle with Russian authorities around the world,” according to the filing.
Cyber attack and pandemic
Caldwell also said that Stoli's global operations fell “victim to a malicious cyberattack” that forced the company to “be entirely manual while rebuilding systems.”
CNN points out that the slowdown in alcohol demand disrupted plans and impacted the results of several companies in the wake of the pandemic as people stuck at home and stocked up. Stola's documents indicate that it is seeing “a decline and easing in demand for alcohol and spirit products following the Covid pandemic, particularly starting in 2023 and continuing until 2024.”
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