The world’s second largest premium alcohol group, Pernod Ricard, is getting ready to close its representative office in Russia, Kommersant news outlet reported on Friday, citing sources within the company. The concern owns such brands as Absolut vodka, Jameson whisky, Ballantine’s and Ararat brandy.
According to the report, the termination of the business will be overseen by Ignaty Arakelyan, who used to manage Pernod Ricard’s subsidiary in Armenia, the Yerevan Brandy Company.
Shutting down the local headquarters will be the final step for the group’s withdrawal from Russia. Arakelyan confirmed to Kommersant that the company’s local branch is currently going through the necessary procedures to stop its Russian operations, adding that Pernod Ricard has no other plans for the Russian market at the moment.
According to company sources, almost the entire team has already left the Russian branch, with the remaining employees expected to be let go later this month.
Along with a number of other Western drinks companies, Pernod Ricard suspended exports to Russia in March 2022 amid Western sanctions placed on the country in connection with the conflict in Ukraine. However, the French group resumed deliveries of some of its brands to the country when stocks began to run low late last year, saying the decision was necessary to protect its local staff from accusations of intentional bankruptcy, a criminal offence in Russia.
In May this year, however, Pernod Ricard announced that it had again stopped all imports of its products to Russia after threats of boycotts in Sweden and Ukraine.
Meanwhile, Ararat brandy, produced at a factory in Armenia, continues to be supplied to Russia, the source told Kommersant. This was confirmed by Ernest Khachaturyan, the CEO of Luding Group, which became the official distributor of the Ararat brand in Russia in 2021. Khachaturyan told the news outlet that the distribution contract was valid, and did not voice any plans to halt deliveries due to the exit of Pernod Ricard.
Up to 90% of Ararat brandy is reportedly consumed in Russia, and the factory does not have alternative markets for the drink that could substitute the demand. Trade sources claim that Luding Group plans to buy the Armenian factory from Pernod Ricard, but the French company’s representative has denied any plans to sell the business.
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