Partnership
SOBER SPECULATIONS ON MUTUAL BENEFITS
Gilbert Doctorow,
UDV's representative in Moscow
Vladimir Sharshov,
Director General of the LIVIZ company
It has already been two years since St. Petersburg's oldest and Russia's most famous liqueur and vodka-making LIVIZ plant enriched the list of its products with a brand name, which, though foreign, sounds familiar to all Russians. It has started the production of Smirnoff vodka. This is the result of a business partnership between the United Distillers and Vintners company (UDV), which is a part of the powerful Diageo corporation, and the LIVIZ plant. Thanks to this, equipment and technologies for the new beverage appeared at the St. Petersburg plant.
Mr. Gilbert Doctorow, UDV's representative in Moscow, told us how Smirnoff returned to Russia: "As early as before the Russian revolution Pyotr Arsenyevich Smirnov was delivering "export quality" vodka abroad. As it was common at the Russian court, he was called Pierre Smirnoff in French, and all deliveries abroad were labeled with this brand name.
After the Russian revolution Pyotr Smirnov's son, Vladimir Petrovich, emigrated, taking with him the know-how and recipes for producing Smirnoff vodka. This is when the history of the trademark began.
Smirnoff vodka persistently kept making its way to the rather sophisticated American and European markets, cultivating in consumers a taste for a new alcoholic drink. It was advertised as an indispensable ingredient for different cocktails, the favorite drinks of the celebrities, people of independent and riotous spirit. The slogans, advertising the product throughout the world, sounded new and full of humor. The phrase "It knocks you off your feet and takes your breath away," pronounced by one of the guests at a party after he had tasted a Bloody Mary, became Smirnoff's advertising slogan in the 1960-ies. Later on, it was accentuated that the consumer of the spirit "was breaking up the thoroughly rotten principles of life and was disdaining routine." Recently, a new image has been born, based on the sensations of purity and translucency.
In short, Smirnoff vodka found its place in a world in which whisky, gin and rum had been drunk for ages. It became one of the most popular spirits, surpassing whisky and gin in the 1970s. Today, the Pierre Smirnoff company annually sells over 15 million 9-litre boxes of vodka in 150 countries. People buy over 700,000 bottles of Smirnoff vodka every day.
Speaking about Russia, one of the largest vodka consuming markets in the world, it is absolutely obvious that the world's best known and best sold vodka has to be produced and sold in Russia. In 1997, upon careful analysis of the vodka market and of the production capacities, we launched the production of the full range of Smirnoff vodka here in St. Petersburg.
"Each partner has gained," says Vladimir Sharshov, Director General of the LIVIZ company.
"Before making us a proposal to begin the production of Smirnoff vodka, the UDV company had examined the best liqueur and vodka making plants in Russia, which are able to produce spirits of export quality. The approach was very tough: technicians, mechanics, financiers and administrators came here more than once. They made their choice in favor of our plant, which pleased but not surprised us, because we were well aware of our capacity and of our plant's high production level. A series of talks followed, which resulted in eliciting mutual interests connected with Smirnoff vodka production in Russia.
Our LIVIZ plant is able to produce any alcoholic drinks that exist in the world. Therefore, the principal conditions, which we set forth to our Western partners, were simple: equal investments for the complete realization of this project, which embraced production organization, technical re-equipment, equipment of laboratories, elaboration of technical documentation, and more.
Our partners were serious. All equipment was delivered and financed on time and, on the whole, whatever had been planned, was accomplished. We are now producing Smirnoff vodka in accordance with the mutual plans and schedules. No serious problems have arisen so far, because, in my opinion, honest and open business relations were formed between LIVIZ and UDV, and I do hope they will be maintained in the future.
Is such partnership to the benefit of our plant? Yes, it is. We are producing Smirnoff vodka not only for the internal market, but for the external market as well, which is twice as profitable. The label on each bottle informs that the product was made in Russia, in St. Petersburg, at our plant. We get a guaranteed amount of purchases and sales, we get paid on a regular basis and we are spared all problems concerning trade organization and advertising. For our part, we guarantee that the product is produced on time and that its quality is as high as the quality of any LIVIZ product.
Speaking about our products' quality, there is one subtlety: in no way can one define it as "better" or "worse". We produce vodka of international quality and, in many ways, it may rival the world's best vodkas. Smirnoff is, first and foremost, a special patent technology of purification which was introduced on our plant in cooperation with our Western partners.
Therefore, I consider our partnership with the UDV company highly successful and fruitful. It may serve as an example of mutually beneficial operations where both parties manage to satisfy their interests and to work together for the sake of common business.
