By Dan Christensen, FloridaBulldog.org
UPDATE AUG. 10. 3 p.m. – Ukraine’s anti-corruption agency Thursday added liquor giant Bacardi Ltd., whose U.S. operations are based in Coral Gables, to its list of “international war sponsors.“
“Bacardi Limited continues to pay significant taxes to the budget of Russia, support its economy and sponsor aggression against Ukraine,” Ukraine’s National Agency on Corruption Prevention said in a press release.
Shortly after Russia invaded Ukraine in February 2022 Bacardi publicly pledged its support for Ukraine and announced that it had “paused exports to Russia and froze advertising” there.
That was then. With the war still raging, this is now: Bacardi’s Russian subsidiary, Bacardi Rus LLC, is enjoying a “financial bonanza,” according to the Business & Human Rights Resource Centre.
Bacardi’s promise, which included a $1-million donation to the Red Cross and the Mercy Corps for humanitarian aid to Ukraine, was widely reported in the international press. “However, the pledge to halt [sales of liquor] disappeared from the press release soon after and, over the past year, the profits enjoyed by Bacardi’s Russian outfit have tripled,” the Resource Centre said.
Bacardi, which is based in Hamilton, Bermuda boasts a portfolio of 200 brands including Bacardi rum, Grey Goose vodka, Dewar’s Scotch, Bombay Sapphire gin, Patron tequila and Martini & Rossi sparkling wine and vermouth.
The company did not respond to a request for comment about its Russian operations.
MANY WESTERN COMPANIES PULL OUT
After Russian President Vladimir Putin ordered the invasion of Ukraine many Western companies pulled out of Russia. The U.S. and numerous other countries also imposed sanctions on Russia that made doing business there impossible.
But products like alcohol are not subject to sanctions, according to The Wall Street Journal. And since the imposition of sanctions, Russia has legalized so-called “parallel imports,” goods that can be imported without the approval of their makers.
According to Bacardi’s website, it began selling booze in Russia in 1992. Today, it employs 350 people and has offices in seven cities: Moscow, Istra, St. Petersburg, Novosibirsk, Nizhny Novgorod, Rostov-on-Don, and Yekaterinburg.
Bacardi, the world’s largest privately-owned spirits company, is notoriously secretive about its financial information. Internal company documents previously obtained by Florida Bulldog show that there are about 450 shareholders, most descendants of company founder Don Facundo Bacardi, who began distilling rum in 1862. Estimates of the company’s net worth run as high as $25 billion.
But Russia’s Federal Tax Service offers a peek under the hood of Bacardi Rus. Its website shows that compared with 2021, Bacardi’s assets jumped last year from 57 million rubles to 850 million rubles, or nearly $8.8 million. Reported revenue went up from 30.1 billion rubles ($310.4 million) to 32.6 billion rubles ($336.5 million).
BOOZE BUSINESS IN RUSSIA IS BOOMING
The Wall Street Journal reported Tuesday that Bacardi Rus imported $169 million of products during the 12 months ended June 30, according to Russian government customs data collected by Export Genius, a trade-data specialist. The story also reported that Bacardi has thrived in Russia while competitors, including giant Diageo, owner of Smirnoff vodka, Guinness beer and Johnnie Walker Scotch whisky have quit Russia completely.
The Business & Human Rights Resource Centre, a nongovernmental agency that tracks human rights impacts of more than 10,000 companies across nearly 200 countries, reported on June 30 that “Bacardi is currently exporting its products to Russia via its own subsidiary. Since Russian tanks were ordered over the border into Ukraine, Bacardi Rus has been granted for four bills of entry, which guarantee that its products meet the required standards to clear customs. These bills of entry have long validity periods, which means that multiple consignments can be delivered before they need to be renewed. For example, on March 20, the company obtained an EAEU [Eurasian Economic Union of several post-Soviet states] declaration for Martini Bianco Special Edition. This was valid for five years, allowing imports of vermouth until March 19, 2028.”
Sales in Russia have been so sufficiently booming that Bacardi is advertising to grow its staff of employees there.
“Bacardi is a company of opportunities, career as well,” says a page on its website translated from Russian. “Here, the development and growth of employees, cross-functional and international movements are welcomed and encouraged. If you want to become a part of Bacardi, send you CV to us at: [email protected].