There’s an interesting phenomenon going on right now that alcohol sin stock investors need to pay attention to. I’m going to do a terrible job of summarizing it for you in one paragraph:
According to critics, Russia has taken a strong stance against the gay and lesbian community by enacting a law that could lead to discrimination of anything overtly homosexual. (To be fair, I don’t know what the law is because that’s not the point of my blog post). In protest to this seemingly anti-gay legislation, some people are protesting.
All this makes sense so far. But here’s where it gets weird…
The protests are taking the form of dumping Russian vodka (and presumably not serving it anymore).
I’m totally fine with protests and I think they get the job done in a world gone crazy. But a protest has got to make sense, people! Unfortunately, this one does not.
First of all, it counters one form of stereotyping and discrimination with… yes… stereotyping. (“This will really stick it to those Russians!”). Why not also throw out Russian dolls?
Also, it’s poorly informed. Just because a company sells Russian vodka does not make it Russian. The two Russian vodka brands at the top of the protestor’s hit list are two privately held companies — Russian Standard and Stolichnaya — but only one is really Russian.
- Russian Standard is privately owned by billionaire Roustam Tariko, who also owns a bank and an insurance company. As of 2009, this product is sold in over 70 markets.
- Stolichnaya is privately owned and, as KTVU reported on their website, “Stolichnaya CEO Val Mendeleev has said that although Stolichnaya is made from Russian ingredients, the company is owned by a group headquartered in Luxembourg and one of its main production and bottling facilities is in Latvia.”
Here’s an excellent article from The Week that explores the question of whether or not a vodka protest in the US will be effective at turning the tides in Russia. (Short answer: “No.”)
So what does this mean for you?
Well I think it means opportunity.
Whether or not the Russian government will change its mind because a handful of privately held, barely-Russian brands are being dumped down the drain is debatable.
But people aren’t turning away from vodka altogether. They will still want vodka. And now they’ll need to fill those empty bar shelves with some other brand.
Perhaps it will be one of the publicly traded brands that are not associated with Russia?
Beam (BEAM), Brown Forman (BF-A), Constellation Brands (STZ), and Diageo (DEO) — among others — all produce vodka. (Some of these brands, such as Smirnoff, might be confused by protestors as being “Russian” but for the most part, all these brands produce vodka that is not Russian or not explicitly Russian).
If you think people will still be drinking vodka long after these protests have finished, then these are the brands that will likely need to be purchased to replace the vodka dumped down the drain.