Stoli Vodka Files for Bankruptcy in the U.S., Citing Financial Struggles

Stoli Group USA, the American division of the iconic vodka brand, has filed for Chapter 11 bankruptcy amidst challenges including declining demand, a significant cyberattack, and prolonged legal battles with the Russian government.

In its filing, the company revealed liabilities ranging from $50 million to $100 million, citing “financial difficulties.” Despite the bankruptcy proceedings, Stoli vodka and Kentucky Owl bourbon will remain available in stores as the business undergoes restructuring.

Formerly branded as Stolichnaya in the U.S. – a name translating to “capital city” in Russian – the vodka rebranded to Stoli in 2022 following Russia’s invasion of Ukraine. The change aimed to distance the brand from Russian associations amidst consumer boycotts. Though often marketed as a Russian vodka, Stoli has been produced in Latvia for decades.

Stoli’s founder, Russian-born billionaire Yuri Shefler, has been in exile since 2000 due to his opposition to Russian President Vladimir Putin. CEO Chris Caldwell highlighted the brand’s longstanding tensions with the Russian government, stating, “The Stoli Group has been targeted by the Russian Federation since it was formed nearly 25 years ago.” Earlier this year, both the company and Shefler were labelled “extremist groups working against Russia’s interests” by the Russian state.

The legal battle with Russia has cost Stoli “dozens of millions of dollars,” adding to its financial woes. Compounding the issue, a recent cyberattack disrupted operations, forcing the company to function manually while rebuilding its systems.

Additionally, a decline in alcohol demand post-pandemic has further pressured Stoli’s U.S. business. The company noted a “softening of demand for alcohol and spirits products” starting in 2023 and persisting into 2024, exacerbating its financial struggles.

Stoli Group is a subsidiary of Luxembourg-based SPI Group, which owns multiple wine and spirits brands. While its global operations continue, the U.S. bankruptcy marks a critical juncture for the company as it seeks to stabilise and rebuild its American presence.