Russian $2m "Alcohol" & The Battle For Stoli

The latest court cases reveal more about life in Putin's Russia...

In November 2016, Russian Economic Development Minister, Alexei Ulyukayev, was called to a meeting to discuss the sale of Bashneft, a state-controlled oil company, to the Rosneft oil company, by the man described as being "Putin's Right Hand Man", Rosneft CEO Igor Sechin.

At the meeting, Ulyukayev was handed “a little basket with sausage” and a lockable brown bag, which he claims to have thought contained "a gift of expensive alcohol". He doesn't say if he was expecting a 6 pack of Budweiser or a bottle of Henri IV, Cognac Grande Champagne.

Instead, the bag contained $2m in cash and, in an apparent sting operation, he was arrested on the spot by Rosneft's head of security — who also happens to be a high-ranking FSB security service official.

Charged with accepting a $2 million bribe for approving the sale of Bashneft, he was fired by Russian President Vladimir Putin the very next day.

Since the sting, Rosneft has sold $11 billion of shares to to the controversial Anglo-Swiss commodity trader Glencore Plc, together with the Qatari state, through a Cayman Islands company whose ownership cannot be traced.

Ulyukayev is the first sitting government minister to be detained by police since the Stalin era and is facing up to 15 years in prison if found guilty of accepting the $2 million cash bung, which he still denies. It is reported in Russia that Sechin is influential in choosing the Russian Prosecutor General.

It's not the only alcohol-related legal case involving the Russian state at the moment as the battle for Stolichnaya vodka is taking place in courts across the globe.

The "Internatonal" Stolichnaya

The former state owned vodka brand was bought cheap by billionaire, Yuri Shefler, in 1997 after it was privatised during the collapse of the Soviet Union in 1997.

After falling out with President Putin and having an arrest warrant placed on his head for "intimidation of Russian Government officials", Shefler became exiled in Switzerland, registering Stolichnaya in Luxembourg and moving production to Latvia.

Missing out on huge revenues of the world's fourth best selling vodka, the Russian Government claimed in 2001 that they still owned the Stolichnaya brand as it had been privatised illegally and transferred the rights inside Russia to state-owned FKP Soyuzplodimport, who make their version in Kaliningrad, using virtually the same bottle design.

The Russian Stolichnaya

Whilst the Russian Government argue that they own the rights to the brand, Shefler accuses Putin of trying to make a property grab in favour of rewarding his close friends. The two parties have been fighting trademark cases across the globe, with findings this week in Brazil and Australia both following cases in Austria (2014) by ruling in favour of the exiled Yuri Shefler.

In Holland, the Hague found in favour of the Russian Government in 2015 with Shefler temporarily changing his brand to "Stoli", using the motto "Same Vodka. Different label", before that too was banned. The Russian version of the vodka is now on sale in Belgium, The Netherlands and Luxembourg.

Shefler's "Stoli" has been labelled the anti-Putin vodka with their marketing including attacks on the Russian Government, including the pro-LGTB rights "Stoli For Equality" campaign in response to anti-gay laws in Russia. [here].

[Click Here to buy "The Latvian" Stoli]