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Diageo to close down Russia operations

Smirnoff owner Diageo has confirmed it will wind down its business in Russia by the end of this year.

Smirnoff Diageo
Diageo owns the world’s biggest vodka brand, Smirnoff

In March this year, UK-headquartered Diageo was among a number of spirits firms to suspend sales in Russia in response to the war in Ukraine.

A Diageo spokesperson said: “Following our decision in March, to stop shipping and selling our products in Russia, we have now taken the difficult decision to responsibly wind down our business operations in the market.

“We expect this process to take approximately six months, during which time our focus will remain on supporting our employees in the region and providing them with enhanced redundancy terms, while ensuring we comply with local regulations.”

In Diageo’s 2021 fiscal year results, net sales in Eastern Europe increased by 6%, mainly driven by ‘strong growth’ in Russia, and partially offset by decreased sales in Lebanon.

Brown-Forman, Pernod Ricard, and Edrington have all suspended sales in Russia.

A number of companies have made donations to support Ukrainian relief efforts, including Nemiroff, Bacardi, and Emporia Brands.

Russian vodka was hit with a 35% additional tariff in the UK, after the government imposed the extra import tax on hundreds of Russian products worth more than £900m (US$1.2m) in March.

The Spirits Business looked at the impact the war in Ukraine could have on Russian vodka, with alternative brands coming to the forefront.

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