Latvijas Balzams bought by Russian rival

RIGA - Russian drinks giant Soyuzplod-import, part of the SPI group of companies, last week announced the purchase of a controlling stake in beverage producer Latvijas Balzams.

In a statement June 20, Soyuzplodimport's General Director Andrei Skurikhin said his company had negotiated with NTBDC LB for its stake in Latvijas Balzams - a stake which, according to Latvia's stock exchange, amounts to 49.9 percent.

The deal had been signed on June 19, he said, adding that the sale price would not be disclosed. He said the deal is the "logical way out" of a dispute between Soyuzplodimport and Latvijas Balzams over Latvijas Balzams' use of the Moskovskaja, Stolichnaja and Sovietskaja Shampanska brand names, which are owned by Soyuzplodimport and used under license by Russian drinks manufacturer Kristal.

"Having gained control of the Baltic states' largest alcohol producer, SPI has not only settled one of the most serious trademark ownership disputes, but is has also obtained an essential foothold in Europe, allowing it to significantly raise production and sale of its products, including Stolichnaja and Moskovskaja vodka," the statement read.

Last October the Riga District Court ruled that Latvijas Balzams, which also produces Latvia's national drink Rigas Balzams and its own branded vodka LB, must stop using Soyuzplodimport's brand names.

Raimonds Lochmelis, spokesman for Latvijas Balzams, declined to comment on Skurikhin's statement and staff at NTBDC LB were not available for comment.

NTBDC LB is among the companies which make up the New Technology and Business Development Corporation, formerly the Ave Lat Group of People's Party leader and former Prime Minister Andris Skele. Its shareholders resolved to liquidate the company at a meeting last December.

Maris Manchinskis, head of financial markets at Hansabanka, applauded the deal. "It will allow synergies between Soyuzplodimport and Latvijas Balzams, at a time when there is a lot of competition. They will want to expand to Estonia and Lithuania and sell Soyuzplodimport's products there.

"Compared to Western companies, Russian companies have different approaches to corporate governance, but they understand the market better."