Russia's Beluga Group sells international rights to flagship Beluga vodka brand for $75 mln

MOSCOW. Oct 19 (Interfax) - Beluga Group , one of Russia's largest alcohol producers, has sold the international rights to its flagship brand due to problems with exports.

"Due to the current political situation, Beluga Group has decided to sell the international rights to the Beluga super-premium vodka brand while retaining the intellectual rights to the trademark in Russia. The size of the transaction is expected to be over $75 million, which is significantly higher than the value estimated by independent appraisers," the company said in a press release.

The transaction will enhance the company's liquidity and therefore enable the group to adhere to its current dividend policy, Beluga said.

The Beluga brand will continue to be part of the group's product portfolio and have a presence on the Russian market.

Exports of Beluga vodka generated 4% of the group's revenue in 2021 and accounted for 2% of shipments by volume, so ending exports of the brand will not have a significant impact on the group's overall results, the company said.

In the near future, Beluga Group said it will focus on the Russian market in order to maintain its leading positions in the remaining lines of business.

"The company will continue to develop popular brands in key categories of alcohol, create new products that will meet the tastes of consumers and replace outgoing foreign spirits. At the same time, the group will represent the products of foreign partners and conclude new contracts, engage in winemaking, improve and scale the in-house WineLab retail chain and thus remain the largest player in the domestic alcohol market," Beluga said.

External factors led to a number of complications in vodka exports from Russia, which in turn caused a drop in sales or the termination of work with several countries, the company said. These factors included a direct ban on shipments to the leading markets of super-premium alcohol, the United States and the European Union, which nearly ended cooperation with the largest duty free operators; an import tariff increase in the UK; the delisting of Beluga vodka from the range of products at the largest retailers in Australia; as well as the general refusal of many foreign distributors to renew partnerships with the Russian brand.

In addition, due to sanctions imposed by the U.S. and the EU, and in compliance with European legislation, Beluga Group had to shut down the operations of its warehouse in Riga on July 9. "Thus, export business for Russian vodka became practically impossible," the company said.

Beluga Group's principal beneficiary is Alexander Mechetin with 58% of shares. The free float is 15%. The company is listed on the Moscow Exchange .