Who's Stoli now? Allied Domecq in Russian dispute

Drinks giant Allied Domecq is being sued by the Russian authorities in a row over Stolichnaya vodka.

Drinks giant Allied Domecq is being sued by the Russian authorities in a row over Stolichnaya vodka.

The Federal Treasury Enterprise, an arm of the Russian government, has filed the lawsuit in New York against Spirits International (SPI), a drinks company that claims to own Stoli.

Allied Domecq's US arm has also been named, however, because the owner of Malibu rum and Mumm champagne is the US distributor. Sales recently reached around 1.9 million cases a year, and investment bank Lehman Brothers estimates Allied Domecq makes profits of around $15 (£8) on each case.

SPI and the Russian government have been locked in various bitter disputes around the world for some years now. The authorities say the Stoli trademarks, estimated to be worth around $400m and originally state owned, were stolen when the Soviet Union collapsed. They were eventually passed on to SPI but Russia claims it remains the rightful owner.

The US trademarks of the brand were assigned to Allied Domecq by SPI in 2001, when PepsiCo's contract to import the drink expired.

It is an important brand for the drinks group. Beer demand in the US is in decline, but spirits sales continue to grow. At Allied Domecq 's interim results last month, Stoli, along with Malibu and Sauza tequila, were highlighted as key brands.

The US lawyers for the Russian government have asked the judge to cancel the deal with Allied Domecq and award unspecified damages. However, a company spokesman was unfazed: "Allied Domecq takes no position in the dispute between the Russian government and SPI about the ownership of Stolichnaya."

Another insider said that even if the Russians won the case, they would still need a distributor.