A major alcohol producer has announced plans to sell off two of its U.S. brands’ inventory, as bankruptcy filings continue to stall.
Luxembourg-based producer The Stoli Group confirmed last week that the move will affect its Kentucky Owl LLC and Stoli Group USA LLC brands, both of which filed for bankruptcy in November.
The move comes as the brand battles with a “quarter-century of unprecedented external pressures,” claiming that a dispute with the Russian government damaged its productivity.
Ownership of the firm is disputed between its Luxembourgish investors and Russian state company FKP Soyuzplodoimport, with the Kremlin seizing the brand’s distillery after it criticized the invasion of Ukraine.
The international brand was later hit by a massive cyberattack on its operations, limiting its ability to distribute its products.
In a press release, the Stoli Group also blamed the slowing of the U.S. spirits market for its financial woes. According to a report by Gallup, just 54 percent of Americans now drink alcohol, the lowest in 90 years.
That has left other companies, including Diageo, Pernod Ricard, Campari, Brown-Forman, and Remy Cointreau, with $22 billion in aging spirits, according to the Financial Times.
The Stoli Group has been forced to go a step further to file Chapter 7 liquidation for the two brands.
“Over the past thirteen months, the Group worked to construct a viable reorganization plan aimed at preserving jobs, stabilizing operations, and protecting long-standing commercial partnerships,” the press release read.
Both Kentucky Owl and Stoli are American classics, with the former hitting the shelves in 1871. Following the prohibition era, the brand changed its commercial strategy and began releasing limited batches of high-quality whiskey.
Each bottle was priced from anywhere between $50 and $600.
Meanwhile, Stoli, which was originally marketed as Stolichnaya, is a U.S. nightclub classic despite being produced in Latvia.
According to the alcohol company, its other brands will remain on sale. Stoli and Kentucky Owl products will remain on shelves for as long as stocks last.
“We believe there is sufficient inventory of Stoli brands in the US market to ensure consumers will be able to continue purchasing these products for the foreseeable future,” the press statement read.
Meanwhile, control of the Stoli Group USA and Kentucky Owl will be handed over to a court-appointed trustee who will their futures.
The Stoli Group's factories in Spain, Italy, Argentina and the United States will be unaffected by the proceedings and the group has confirmed that it plans to maintain operations in 176 markets.
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