THERE IS SOMETHING GEORGIAN IN ARMENIAN COGNAC

Kommersant, Russia
Aug. 9, 2006

The wholesale license of P.R. Rus, Russia’s subsidiary of French
Pernod Ricard, has been suspended, the Moscow branch of Federal
Service on Consumer Rights Supervision reported via the web-site
yesterday. P.R. Rus is an exclusive supplier of product made at
Yerevan Cognac Enterprise and for a few other world brands of alcohol.

The Moscow Service on Consumer Rights Supervision carried out its
probe in late July. The result was suspension of wholesale licenses
for nine alcohol dealers, including P.R. Rus.

The formal reason voiced by the supervision body was "the breach of
sanitary laws." Employees of one of the affected firms, Vitaveritas,
said the inspectors leeched as the warehouse director had no
photofluorogram available, the mops weren’t numbered and the walls
weren’t painted.

By strange coincidence, all punished companies used to be big importers
of wine of Georgia and Moldova. Pernod Ricard, for instance, owns
Cahetian GWS winery, which was focused on Russia’s deliveries. Besides,
Vitaveritas was the sole wholesaler that proved through the court
that the Federal Service on Consumer Rights Supervision had no right
to confiscate and destroy the wine owned by it.

For P.R. Rus, the root problem could be its leading standing on
Russia’s market of elite alcohol. In terms of value, Business-Analitika
says, Pernod Ricard covers around 22 percent of the whisky market,
has roughly 12.5 percent on the brandy market and 12 percent on the
market of French cognac. The share on tequila market nears 40 percent.

Moreover, P.R. Rus is an exclusive supplier of product made by Yerevan
Cognac Enterprise, which is owned by Pernod Ricard. The company
controls 55 percent of Armenian cognac market in Russia. More likely
than not, all these achievements prompted the bureaucrats to benefit
from the import alcohol crisis and attempt to squeeze even such majors
as Pernod Ricard.