French drinks group Pernod Ricard is preparing to close its representative office in Russia, as the company continues its withdrawal from the country, according to sources within the company. Pernod Ricard, the world’s second-largest premium alcohol group, owns popular brands such as Absolut vodka, Jameson whisky, Ballantine’s, and Ararat brandy.
Ignaty Arakelyan, the former manager of Pernod Ricard’s subsidiary in Armenia, the Yerevan Brandy Company, will oversee the termination of the business in Russia. Arakelyan confirmed that the company’s local branch is currently going through the necessary procedures to halt its Russian operations. He also stated that Pernod Ricard has no other plans for the Russian market at present.
Most of the team at the Russian branch has already left, and the remaining employees are expected to be let go later this month. This move comes after Pernod Ricard, along with other Western drinks companies, suspended exports to Russia in March 2022 due to Western sanctions in connection with the conflict in Ukraine. However, the French group resumed deliveries of some brands to Russia when stocks began to run low last year, citing the need to protect its local staff from accusations of intentional bankruptcy, which is considered a criminal offense in Russia.
In May of this year, Pernod Ricard again stopped all imports of its products to Russia following threats of boycotts in Sweden and Ukraine. Nevertheless, Ararat brandy, produced at a factory in Armenia, continues to be supplied to Russia. The CEO of Luding Group, which is the official distributor of the Ararat brand in Russia, confirmed that the distribution contract is still valid and that there are no plans to halt deliveries due to Pernod Ricard’s exit.
It is reported that up to 90% of Ararat brandy is consumed in Russia, and the factory does not have alternative markets that could replace the demand. Trade sources suggest that Luding Group intends to buy the Armenian factory from Pernod Ricard. However, the French company’s representative has denied any plans to sell the business.
The withdrawal of Pernod Ricard from Russia reflects the challenges and pressures faced by international companies due to geopolitical tensions and sanctions. As the global business landscape continues to evolve, companies are having to make strategic decisions to navigate complex political and economic environments.
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