Bacardi triples profits in Russia despite promise to exit following Ukraine invasion, The Bell reports

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Alcohol producer Bacardi has kept its business in Russia despite promises to leave the country immediately after the start of the invasion of Ukraine, according to a report by independent economics publication The Bell. The profits of the company’s Russian subsidiary have notably tripled since February 2022.

Following Russia's full-scale invasion of Ukraine, Bacardi International posted a statement on its website in March last year condemning the actions of the Russian authorities. The company promised to donate $1 million to the International Red Cross and Mercy Corps, as well as to stop exports to Russia and freeze investments in advertising. Later, however, the sentence about stopping exports and marketing expenditures disappeared from the press release. However, it remained in media publications and can be viewed on the online archive of the page.

The publication noted that the financial performance of Bacardi's Russian subsidiary, Bacardi Rus LLC, has grown significantly over the last year. Compared with 2021, the value of Bacardi Rus’ fixed assets has grown from 57 to 850 million roubles ($660,000 to $9,88 million), according to the company’s statements on Russia’s Federal Tax Service website. The revenue of Bacardi’s subsidiary in Russia has gone up from 30.1 billion roubles to 32.6 billion roubles ($349 million to $378 million), while net profits have tripled from 1.5 to almost 4.7 billion roubles ($17.4 million to $54.52 million).

Bacardi’s portfolio includes Bacardi rum, Grey Goose and Eristoff vodka, Patron tequila, Aberfeldy, Dewar's, and William Lawson's whiskeys, Bombay Sapphire gin, Martini & Rossi vermouth and wines, as well as a range of other spirits. Bacardi Limited, a management company registered in the Bahamas, operates in Russia through its subsidiary Bacardi Rus LLC. The subsidiary is predominantly owned (99%) by Bacardi GMBH of Germany, with the remaining 1% ownership held by Bacardi-Martini B.V. of the Netherlands.

Despite sending inquiries to Bacardi's press offices, including those in the United States, The Bell did not receive any response. Sergei Ponomarev, Bacardi's government relations director in Eastern Europe, acknowledged reading the messages from the correspondents but chose not to respond.

Global alcohol brands have not been able to prevent the supply of their products to Russia, as revealed by Bloomberg in April. Company representatives cited the challenge of controlling the complex sales chain, which allows high-end alcohol to enter the Russian market.
The issue resurfaced in the wake of a scandal involving Swedish vodka maker Absolut (part of Pernod Ricard, the world’s second-largest wine and spirits seller). Absolut made efforts to combat the illicit supply of its products to Russia and announced its intention to resume operations in the country for that purpose. However, due to severe criticism and backlash directed at the company and its employees, Absolut ultimately decided to discontinue the supply of its products to Russia within a week. Сompletely cutting off the supply of products is impossible due to Russian “parallel imports,” admitted Pernod Ricard’s chairwoman and CEO Stephanie Durroux.