A major beverage company filed for bankruptcy ahead of the holidays.
Stoli Group USA, owner of the namesake Stoli brand vodka, said in a bankruptcy filing in Texas late last month that it was experiencing “financial difficulties.”
The company also says it has been the victim of a major cyber attack and has been embroiled in an ongoing legal battle with the Russian government for years, which has cost “tens of millions of dollars.”
In addition to its well-known vodka, the company also produces the high-end brand of Kentucky Owl bourbon, which can sell for as much as $400 per bottle for special batches.
A 750ml bottle of Stoli vodka, meanwhile, costs around $20.
The company said Americans can still buy the drinks as it navigates the Chapter 11 bankruptcy process.
Stoli was sold in the US under the name Stolichnaya – which roughly means ‘capital’ in Russian – until 2022. But the company changed the brand name to Stoli after the Russian invasion of Ukraine and the widespread boycott of Russian-branded items.
The founder of the Stoli Group, Russian-born billionaire Yuri Shefler, was exiled in 2000 for his opposition to Vladimir Putin. CNN reported.
Stoli Group USA, owner of Stoli’s namesake vodka, said in a bankruptcy filing in Texas late last month that it was “experiencing financial difficulties.”
“The Stoli Group has been targeted by the Russian Federation since its founding nearly 25 years ago,” Chris Caldwell, CEO of the Stoli Group, said in a statement.
“Earlier this year, the company and our owner were both named by the Russian state as ‘extremist groups working against Russian interests.’
An ongoing legal battle with the Russian government has forced Stoli to spend “tens of millions of dollars on this protracted lawsuit around the world with Russian authorities,” the court said.
Russia claims that after the collapse of the Soviet Union, the brand became the property of the Russian Federation, and not of Shefler’s SPI Group, which acquired it in 1997.
Caldwell also said the company’s global operations were the “victim of a malicious cyber attack,” forcing the company to “operate entirely manually while its systems were rebuilt.”
Although Stoli has long been branded as a Russian vodka, its production facilities have been in Latvia for decades, according to CNN.
In addition to its signature vodka, the company also produces the high-end brand of Kentucky Owl bourbon, which for special batches can sell for as much as $400 per bottle.
The company said Americans can still buy the drinks as it navigates the Chapter 11 bankruptcy process
A slowdown in alcohol demand following the Covid-19 pandemic has also affected the company’s finances.
Stoli has seen a “decline and softening in demand for alcohol and spirits products post-Covid and primarily beginning in 2023 and continuing into 2024,” according to the court filings.
During the pandemic, many people stocked up on drinks at home while stay-at-home orders were still in effect and bars were closed.
The bankruptcy filing comes as Americans fear their favorite drinks could rise in price next year if President-elect Donald Trump implements his proposals to impose widespread tariffs.
Trump has promised to impose 25 percent tariffs on America’s two largest trading partners, Mexico and Canada, on the first day of his presidency.
Modelo Especial Lager, which has overtaken Bud Light as the top-selling beer in the U.S., is imported from Mexico by parent company Constellation Brands.
If the full cost of the tariff were passed on to consumers, a six-pack of Modelo would rise from about $11 to $13.75, USA Today reported.