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Stoli Group USA, owner of the eponymous vodka, filed for bankruptcy as it grappled with slowing demand for alcoholic beverages, a major cyberattack that threatened its business and several years of court battles with Russia.
The company said in its bankruptcy filing that it was “experiencing financial difficulties” and cited between $50 million ($77 million) and $100 million ($154 million) in liabilities. Stoli vodka and Kentucky Owl bourbon will continue to be available on store shelves while the company goes through the Chapter 11 process, which applies only to its US operations.
Until 2022, Stoli was sold in the US as Stolichnaya, loosely translated as “capital” in Russian. The company shortened its name after the Russian invasion of Ukraine and the boycott of Russian brand vodka.
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The founder of the Stoli Group, Russian-born billionaire Yuri Shefler, was expelled from the country in 2000 for his opposition to President Vladimir Putin.
The alcohol has long been advertised as Russian vodka, but its production facilities have been in Latvia for several decades.
Stoli Group is a unit of SPI Group based in Luxembourg, which owns other brands of alcoholic beverages and wines.
“The Stoli Group has been targeting the Russian Federation since it was founded almost 25 years ago,” Stoli Group CEO Chris Caldwell said in a statement.
“Earlier this year, the Russian state designated both the company and our owner as ‘extremist groups working against the interests of Russia’.”
The ongoing legal battle with the Russian government has forced Stoli to “spend tens of millions of dollars on this protracted legal battle with Russian authorities around the world,” according to the court filing.
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Caldwell also said Stoli’s global business was “the victim of a malicious cyber attack” that forced the company to operate “completely manually while systems are restored.”
Falling demand for alcohol has crushed the revenues of several companies after the pandemic when people stayed at home and stocked up. Stoli’s filings said there has been a “post-Covid decline and softening in demand for spirits and spirits, particularly starting in 2023 and continuing into 2024.”
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