Nemiroff demands to stop production of its products in Russia

Having revoked the license for the production of alcohol in Russia after the outbreak of hostilities in Ukraine, Nemiroff initiated a legal dispute with a former local partner. The owner of the brand requires the United Penza Vodka Plants (OPVZ) holding to stop using the brand, which violates the rights of Nemiroff since February 2022. In the Russian Federation, the brand is in the top 15 vodka brands, and it will be difficult for a manufacturer to replace it, experts say.

In June, Nemiroff Intellectual Property Establishment filed a lawsuit with the Arbitration Court of the Penza Region to ban the OPVZ from using Nemiroff brands in the production and sale of alcoholic beverages, Kommersant found in the files of cases. The plaintiff also asks to recognize such actions of the defendant, committed after February 1, 2022, as a violation of their rights. A hearing on the suit has been scheduled for November 2.

Registered in Liechtenstein, Nemiroff Intellectual Property Establishment owns one of the most popular Ukrainian alcohol brands Nemiroff. The main production is located in Nemirov, Vinnitsa region. According to its own data, it occupies the main share in the export of vodka from Ukraine, it is supplied to more than 80 countries. In 2022, as Drinks International magazine reported, world sales of Nemiroff decreased by 57.1%, to 21.6 million liters, which the publication attributed to the negative effect of military operations.

After the outbreak of the Russian-Ukrainian conflict, Nemiroff announced the revocation of the license to produce drinks under its own brand in Russia. How spoke to the Ukrainian media Nemiroff CEO Yuri Sorochinsky, the last licensee was an independent manufacturer in Penza. But, a Kommersant source in the market notes, OPVZ apparently continued to bottle Nemiroff even after the license agreement expired on February 1, 2022. According to the Rosaccreditation registry, since the beginning of 2023, OPVZ has received several declarations for the release of different lines of vodkas and tinctures called Nemiroff. The OPVZ and the office of the manufacturer Nemiroff “Kommersant” did not answer.

According to a Kommersant source on the market, Nemiroff now ranks 11th in sales among vodka brands in Russia. Stanislav Kaufman, owner of the Kaufman brand agency, says that Nemiroff accounts for a significant amount of OPVZ production and it will be extremely difficult to replace such a popular brand without confusing similarity. The owner of the Khortytsya brand, the Global Spirits holding, also revoked the license to produce its brands in Russia, and the local companies that produced this vodka launched the Khorta brand.

Anatoly Semyonov, director of the Parallel Import Association, says that if Nemiroff’s requirements are met, all products of the same name issued without a license by the OPVZ should be recognized as counterfeit, confiscated and destroyed. “But it is not certain that the copyright holder will achieve this by filing lawsuits against retail chains,” Mr. Semyonov notes. In X5 Group (Pyaterochka, Perekrestok), Magnit, Lente, Red & White, Kommersant did not answer.

Kommersant’s interlocutor in the industry believes that informal agreements could be maintained between OPVZ and Nemiroff, allowing the plant in Penza to use the brand, and going to court could be risk insurance. Otherwise, Nemiroff would have made financial demands, says a Kommersant source. According to Mr. Semenov, Nemiroff may demand double the proceeds from the sale of products released without a license. But the company may be skeptical about the prospects of receiving the funds, or its goal is to impose an injunction on the production and sale of products in Russia, he says. Yulia Yarnykh, a Semenov & Pevzner partner, adds that Nemiroff may file a claim for damages or compensation after the current litigation is resolved in its favor and the defendant refuses to comply with the injunction.

According to Stanislav Kaufman, after the criminal case against the owner of Global Spirits Yevgeny Chernyak, all Ukrainian brands of vodka in Russia are at risk (see Kommersant of July 3). The expert notes that regardless of the reasons for the claim and the outcome of the dispute, the effect for Nemiroff can be negative, as the brand risks attracting unwanted attention.

Anatoly Kostyrev