Among Polish vodkas, we can find many legendary brands dating back to a centuries-old tradition. They are recognizable not only in the country, but even all over the world. For years, however, there has been a discussion as to whether some "Polish vodkas" are really Polish. Even if they were produced in Poland and referred to the traditional local recipe, they were bought by foreign capital. And this, to a large extent, is Russian capital. Many Polish consumers took it away, making them feel that by buying something that “was Polish, but Polish has ceased to be”. As it turned out, however, the situation has recently changed, as the leading Polish alcohol brands have returned to their domestic capital!
How did "Żubrówka" get into the hands of the Russians?
The whole long history dates back to the People's Republic of Poland. More precisely, it concerns the formerly state-owned enterprises of Polmos (acronym from the words "Polish spirit monopoly"), which in "rightly past times" had a monopoly on the production of spirits, including vodka. However, after 1989, when the socio-economic system changed, the assets of Polmos began to be sold off and thus they found their way into the hands of private or foreign capital.
In 2005, a 61% controlling stake in Polmos was purchased from the Ministry of the Treasury by the American company CEDC (Central European Distribution Corporation) listed on the stock exchanges in Warsaw and New York. The cost of this transaction amounted to over one million zlotys. Investments in Polish spirits and vodka brands must have seemed profitable to the Americans, as CEDC later increased its stake in Polmos even more. It seemed that they approached the matter with full impetus: even before the purchase of Polmos, the American company was engaged in the wholesale trade in alcohol on the Vistula River and purchased a distillery in Oborniki, Greater Poland (it produced vodka brands such as Bols, Soplica and the Royal Vodka product distributed in Hungary) .
The investment in Polmos in Poland paid off for the Americans. CEDC quickly became a tycoon on the Polish vodka market, bringing satisfactory turnover. The Americans, encouraged by this success, gained an appetite to conquer another "alcoholic beverages market" - Russia. And so, in 2008, CEDC started buying a distillery in Russia. Unfortunately, this procedure turned out to be unsuccessful and the company fell into a crisis. Soon, CEDC stock plunged.
Interest of the oligarch
The cheaper CEDC stock was occasionally bought by Russian businessman Roustam Tariko. You can consider him an interesting persona. He made his fortune in the era of the so-called "Gorbachev's perestroika" (that is, during the last years of the USSR's existence) and in the 1990s. His business contacts began with not entirely legal services to Italian tourists who came to Moscow. Enterprising Roustam offered them a comprehensive service at a much lower price than the state-owned company Intourist. This is how he made his first business contacts. Later, he made his first big money selling alcohol in Russia - Italian vermouths.
It turned out that Tariko had been dreaming about buying CEDC for several years. So as soon as the company started to struggle, it went straight to action. While CEDC failed to pay off its liabilities to investors, Tariko submitted its own remedial plan. This, in turn, was approved by the US court. As a result, in the spring of 2013, the sole owner of CEDC was Roust Trading - part of the holding company of the Russian oligarch.
In the shadow of the conflict with Ukraine
Along with the entire CEDC, the iconic Polish vodkas, including "Żubrówka" and BOLS, have passed into the hands of Russian capital. This purchase was to turn out to be a golden shot for Tariko. This is due to the Russian-Ukrainian conflict in 2013-2014. As a result, the Russian economy slowed down and the demand for strong alcohol in Russia decreased significantly. However, it was different in Poland. Soon Tariko began to record greater profits from the sale of vodka in Poland, and not on the domestic market. And that's a lot, as much as 1.5 times more! Comparing the general population and purchasing power in Russia and Poland, this can be considered as quite an astonishing result.
Of course, although business has its own rules, the takeover of the iconic Polish vodka brands by Russian capital did not go unnoticed. Unfortunately, ethnic and political scuffles were also not avoided. Therefore, for many Poles, the information that the cult "Żubrówka" and several other vodka brands are returning to Polish capital was a joyful news. The more so as the final takeover of CEDC by Polish Maspex coincided with the outbreak of the war in Ukraine and the global boycott of everything Russian. One could say that the concern couldn't have "hit the moment" better.
Vodka Repolonization - How Did It Happen?
Of course, the repolonization of the cult Polish spirits was not achieved in a few days. The transaction was planned for several years ahead, and the first conditional agreement between the Maspex Group and Roust Corporation was concluded at the beginning of 2021. Why was Maspex trying so hard to buy CEDC? The group wanted to significantly increase its portfolio and become a leader on the Polish market: the largest Polish food group, which could boast of such Polish brands as Żubrówka, Soplica, Absolwent and Bols.
This symbolic element of repolonization is not enough, however. Let's not forget about business. Purchased by Maspex, CEDC is also the largest foreign importer of alcohols to Poland, such as Carlo Rossi, Gancia, Grant's, Metaxa, Jagermeister or Aperol.
Krzysztof Pawiński, co-owner and president of the Maspex Group said: “We have waited a long time for such a project. We strongly believed that one day we would be able to complete an acquisition that would dramatically increase the scale of our business - it would double our turnover. We are entering a completely new, but very interesting segment of the market and expanding our portfolio with new iconic Polish brands, including Żubrówka - the legendary Polish vodka, known all over the world. Their indisputable market power - position and knowledge and the fact that they will be concentrated in one hand are other attributes of the transaction. This is our 20th acquisition - a beautiful culmination of 30 years of Maspex history”.
Interestingly, the Maspex group from Wadowice did not deal with alcohol products for many years. The main activity of the Group was the production and distribution of fruit juices.
Final agreement and echoes of the boycott
The contract concluded in 2021 was finalized on February 25, 2022. Then Maspex formally took over CEDC. It was the moment of re-polonization of brands such as Żubrówka, Soplica, Bols, Absolwent and Żytniówka. Moreover, the Group also managed to stabilize the situation of two production plants in Białystok and Oborniki. Together with CEDC, Maspex also acquired its subsidiary B2B "Wine & Spirits".
As previously agreed, the direct seller of CEDC was the Russian company Roust Corporation, subject to US law. According to the information provided by the Food Portal, the transaction price amounted to PLN 3 billion 477 million. The Maspex Group managed to keep 77% of the transaction value. The money was used to pay off the American bondholders represented by the Bank of New Your Mellon (PLN 760 million) and to pay off potential claims of Russian banks (over PLN 500 million). Moreover, a significant part of this amount was retained in order to secure guarantees concerning the condition of the company provided by the seller.
As it turned out, CEDC had arrears in Poland and its accounts were seized by the tax office. The Maspex Group managed to settle all arrears and straighten the company's affairs.
The outbreak of the war in Ukraine and the strenuous boycott of Russian products significantly changed consumer trends already in February 2022. Not only have international political and economic sanctions been imposed on Russia. The public, outraged by the Russian attack on Ukraine, decided to boycott Russian products from below. It was easy to find lists on the Internet of "Russian products" that should not be "bought" so as not to support Putin's regime. As you can guess, many of these lists also include Żubrówka, Bols and Soplica, which in the consumer minds still functioned as "having Russian capital". Fortunately for Maspex, the news about the repolonization of cult alcohols very quickly spread through the media and received wide coverage. What some consumers declared that now they would be happy to go shopping.