To promote the cocktail, Martin used a grassroots marketing strategy reminiscent of his vodka’s namesake, Pyotr Arsenievich Smirnov, reportedly used in Russia decades earlier. According to company lore, Martin flew out to Los Angeles with one of the first models of the Polaroid camera. He went into bars and took two photographs of the bartender serving the Moscow Mule. He gave one photo to the bartender as a keepsake and took the other photo to a different bar, highlighting to the next bartender his competition’s promotion of Smirnoff vodka and the new cocktail. The ploy worked. Sales of Smirnoff vodka took off, surpassing one million cases annually by 1955.[42]
Heublein then launched a series of aggressive campaigns showing American consumers how to mix vodka with a variety of liquids, from juices to teas to beef bouillon. Slick print advertisements over the next three decades were eye-catching, too, featuring a parade of such top stars as Woody Allen, Groucho Marx, Eva Gabor, Vincent Price, and Marcel Marceau. In 1962 Smirnoff also began a long, high-profile partnership with the James Bond movie franchise. In the first Bond movie, Dr. No, Sean Connery drinks a martini, famously “shaken not stirred,” made with Smirnoff vodka. Since then, bottles of Smirnoff have been featured in twenty-one of the twenty-two Bond films.
These marketing drives propelled Smirnoff from a little-known, foreign commodity into a powerhouse brand, eventually outselling all other premium spirits in America. Moreover, it helped vodka surpass gin and bourbon as the top-selling liquor in America, a position it has largely retained since the 1970s. “Americans, you know, were uninformed about Russia, but they were misinformed about vodka,” explained Kunett in a 1955 interview with The New Yorker.5 Once Americans were reeducated, though, vodka’s upward spiral continued almost without interruption. Today, more than 23 million nine-liter cases of Smirnoff vodka are sold each year in some 130 countries, and Smirnoff, almost 150 years after its founding, is the best-selling premium spirit in the world, outperforming second-place Bacardi by some 4 million cases.6 As for the brand itself, a 2008 study estimated its worth at $4.7 billion.7
AS SMIRNOFF SURGED in the West, the political realities of the Soviet state under Josef Stalin took their toll on the Smirnovs and other similarly situated families. The known fates of Smirnov’s descendants differed, depending upon how closely tied they were to the fallen vodka empire and the former aristocracy. Arseniy, Pyotr Petrovich’s son and the patriarch’s grandson, for instance, suffered miserably. According to an interview in the early 1990s with his son, Pyotr,[43] Arseniy worked as a street cleaner following the revolution. He was arrested and sentenced to death by firing squad in the 1920s because of his family’s capitalist background, but Arseniy’s wife saved him from execution by giving prison authorities everything the couple had. Still, life continued to be unkind to Arseniy; after divorcing his wife a few years later, he moved to the Volga River region and worked as a cemetery caretaker. He tried to flee Russia but was caught and beaten by soldiers with the Red Army. He later remarried and had three children. The family struggled to make ends meet. In 1943 Arseniy died, buried only in his underwear because his clothes had been sold for food.
Vladimir’s son, Vladimir Vladimirovich, also faced difficulties under the Soviet regime. He continued the excellent education his father had started, graduating with an advanced degree from the prestigious Plekhanov Institute. He spoke several languages, including English and French. Before World War II he worked as a senior instructor of physical metallurgy at Moscow’s Machine Tools Institute. According to archival documents,[44] Vladimir was arrested on September 10, 1941. The home he shared with his mother, Aleksandra, his wife, and two daughters was searched. Vladimir was accused and convicted of having “anti-Soviet attitudes and to have expressed dissatisfaction with the existing social order of the U.S.S.R.”8 It was noted in his interrogation, during which he denied the charges against him, that he was from a family of first guild merchants.
For his crimes, Vladimir was sentenced to five years at a corrective labor camp. The hope of the authorities was that his anti-Soviet attitudes could be rehabilitated, and that later he might rejoin society in a more productive manner. His mother, Aleksandra, filed a protest, citing his innocence, her poor health and advancing age, and the livelihood of his daughters, as reasons to reopen his case. Justice was slow in coming, but after five years in prison and almost fifteen years after his arrest, Vladimir was cleared in 1956 of the charges against him for “lack of proof.”9 He left Moscow and moved to Tver, where he taught at a local polytechnic institute. He died in 1969 at the age of sixty-seven, just eight years after his mother had died.
The other Aleksandra, Smirnov’s rebellious daughter who had married Borisovskiy, died in 1950. At the time, she lived in poverty in a small dark room in a communal apartment.10 Her son, Vadim, fared better as an accomplished musician who founded a Soviet school for viola players. As for Eugeniya, she spent the last years of her life in a modest nursing home in Nice. Three years before her death in 1961 at the age of ninety-two, she signed over to her daughter, Tatiana, her claims to the Smirnov estate. According to Eugeniya’s grandson, Boris, his grandmother still held out hope that her rights could one day be restored. “My grandmother gave full power [of attorney] to my mother to do all she could do to prove that she was the sole proprietor of all the [Smirnov] assets,” Boris said.11
Members of the Bakhrushin side of the family had similarly mixed outcomes. These descendants became noted doctors, scientists, and teachers. Pyotr Bakhrushin, for example, worked in a psychiatric hospital in Moscow. Others, though, were not so lucky. Nina Bakhrushina, a foreign language teacher, married a prominent chemist. They were exiled to Siberia after one of her husband’s students accused him of unpatriotic conduct.12
It is, again, unlikely that any of the Smirnovs who remained in Russia, with the possible exception of Nikolay, until his death, knew of Vladimir’s efforts to revive the family business in Europe or his agreement with Rudolph Kunett. Years later, however, as the Smirnoff brand grew in prestige and notoriety, they, like other descendants of once prominent merchant dynasties, grew curious. They wondered about their roots and tried to piece together their forgotten or hidden heritages. Oleg Sergeyevich Smirnov, Sergey’s son and a retired lawyer in Moscow, led the effort in the 1970s for the Smirnovs. Outraged by the way his grandfather’s name was being used in the West, he combed through reams of archived information, assembling a three-volume monograph about the patriarch’s business history and his far-flung family. He discovered relatives he did not know and a global business giant he had not fathomed. The big question, Oleg began to ponder, was whether the Smirnovs could get it back.
THE FIRST OFFENSIVE was launched in the early 1980s in Cologne, Germany. Plodymex, a joint Russian–East German spirits export company, sued a German importer of Smirnoff. Plodymex claimed that Smirnoff’s labels, which included Cyrillic lettering and images of the awards Smirnov had earned a century earlier, misled consumers about its Russian origin. Relying on Oleg’s research, the plaintiff further argued that Vladimir had had no right to sell his family’s trademarks and copyrights to Kunett in 1933 because he had already sold his shares in the business to his brother, Pyotr, in 1905. The charge was potentially explosive. Smirnoff’s future—and past—might hinge on the actions Vladimir took almost five decades earlier, the same actions that salvaged his father’s legacy.
The two companies settled the case in Cologne. Heublein agreed to alter its labels, removing the Cyrillic script and references to Russia or Moscow. In addition, it would make clear that the vodka it was selling was not manufactured in Russia. This settlement, which affected trade only in Germany, was far from the end of the matter. There was a glint of promise in this battle that perhaps there was some merit in the fight. Moreover, Russia was on the brink of dramatic change, just as it had been when Smirnov launched his enterprise in the nineteenth century. Mikhail Gorbachev was coming to power.
Russia in 1985 was in a period of deep stagnation, economically,
politically, and socially. Like Tsar Aleksander II following the painful lessons of the Crimean War, Gorbachev realized that key aspects of communism were outdated and ineffective in a globally integrated world. Problems ranging from corruption to alcoholism to apathy were contributing to a sharp decline in industrial productivity and output. He vowed to introduce comprehensive reform through perestroika (restructuring) and glasnost (openness). These initiatives, Gorbachev hoped, would prompt entrepreneurism, technological innovation, and corporate development.
Gorbachev’s first major campaign, however, did not directly target the economy. It targeted alcoholism. Vodka was still an integral part of life in Russia, and like Witte and others before him, Gorbachev associated drunkenness with Russia’s poor economic and moral condition. Even though the state stood to lose millions of rubles in revenue from its vodka monopoly, he figured that if the people’s drinking could be controlled, other issues might be more easily resolved. Gorbachev’s government in 1985 announced a “comprehensive program for the prevention and overcoming of drunkenness and alcoholism.”13 The production and sale of vodka and other spirits were now limited, and efforts were made to encourage moderation. Russians reacted much the same way they always had—with anger and dissatisfaction. Long lines formed outside liquor shops. It was estimated that some Muscovites spent an average of up to ninety hours a year waiting to purchase alcohol.14 Prices of vodka and other spirits spiked, and a black market for moonshine flourished. In the end, Gorbachev’s sobriety drive failed, and restrictions were relaxed after just a few years.
Other initiatives had a more lasting impact. Gorbachev wanted to transform the old centralized Soviet system into a more robust market-oriented economy. He believed, as Aleksander II had, that modernizing the nation’s financial infrastructure would ease existing societal pressures. He noted that “it is only the market, in tandem with the humanistic orientation of all society, that will be able to satisfy people’s needs, ensure just distribution of wealth, safeguard social rights and guarantees, and consolidate such values as freedom and democracy.”15 Gorbachev’s rhetoric was as groundbreaking as were the reforms he crafted. Private ownership of profit-oriented businesses and cooperatives was not only legalized but encouraged. The law also permitted the establishment of corporations. Greater freedom of speech, more independent media, and an increased democratic political process were also integral parts of Gorbachev’s agenda.
These policies, though hailed in the West, were too slow in coming for most Russians and too restrictive to be effective. Gorbachev faced the difficult task of balancing his communist roots and devotion to socialism with twentieth-century concepts of capitalism and democracy. Moreover, his economic drive ran headfirst into ingrained prejudices throughout Russian society against Western-style capitalism and its foreign institutions. The economy did not improve and everyday life for most Russians went from bad to worse, as shortages of food and other essentials intensified. Gorbachev was replaced in 1991 by the more radical Boris Yeltsin, but few question that it was Gorbachev’s bold reforms that led to the collapse of the Soviet Union by the end of that year. As for the Smirnovs, Gorbachev and his policies also provided the opening they needed.
IN 1985, THE year Gorbachev took office, the Smirnovs held a family reunion at the home of Oleg’s brother, Viktor. Cousins descended from several of Smirnov’s children were present, some having never met before. At this gathering, according to a book written by several Smirnov descendants, some of the Smirnovs began discussing the possibility of reviving the Smirnov dynasty.16 Gorbachev promised to be more hospitable to private business ventures, and Russia would likely welcome the chance to reclaim one of its most storied brands. Little progress, though, was made for five years. First, Oleg died in 1986. Second, the tenuousness of Gorbachev’s economic and legal reforms made it difficult to formulate a cohesive plan of attack.
By 1991 the possibilities were clearer. Boris Smirnov, the great-grandson of Smirnov’s youngest son, Aleksey, and a former KGB officer, led the charge. He registered his family’s trademarks in Russia. One was the “Trade House of Pyotr Smirnov and Descendants in Moscow,” while another was “P. A. Smirnov and Descendants in Moscow.” A month later, Heublein’s new owner, International Distillers and Vintners (IDV), now a subsidiary of British liquor giant Diageo, filed papers for its Smirnoff trademark. Both were readying for the repeal of the vodka monopoly in Russia, which took place in 1992 under Yeltsin’s hand. Russia’s patent office rejected IDV’s claims to sell Smirnoff vodka, thus permitting Boris Smirnov to do so.17
This decision marked the beginning of what would become a protracted international legal tussle for control of the Smirnoff name. The cases hinged primarily on the same arguments posed in the German case—whether consumers were misled about the origins of Smirnoff vodka, and whether Vladimir had illegally sold his family’s name and copyrights after the revolution. Boris and his relative Andrey Smirnov began manufacturing vodka in Krymsk, a small town in southern Russia. They also leased the house by the Cast Iron Bridge in Moscow as their headquarters, partially renovating the grand old residence to its original nineteenth-century condition. Their hope was to revive the traditions of Pyotr Smirnov, profits and all. At first, it looked as though they might succeed. A Russian court in 1995 invalidated IDV’s trademarks and barred the company from claiming that its vodka was related to the spirit’s original founder.
Although IDV appealed the decision, a bigger showdown was on the horizon. Boris sought access to more than the Russian vodka market. He had designs on the lucrative U.S. market. Boris partnered with Eugeniya’s grandson in France, also named Boris, attempting to prove that the French Smirnov had the legal right to the trademark because Eugeniya had bequeathed it to his mother. The Russian Boris then formed the Russian American Spirits Company with an American partner and sued Diageo for fraud and consumer deception in a Delaware court. Smirnoff’s label, they claimed, which featured a crown, shield, red shrouds from the Russian Imperial Court, the state coats of arms, and reference to the tsar’s purveyor title, caused people to conclude that the American Smirnoff was the same one supplied to tsars before the revolution. Boris additionally argued that he and his partners were owed nearly $1.3 billion, or roughly 2 percent of the profits he figured had been made off Smirnoff vodkas since 1939.18
Diageo countered in legal filings that it had purchased the brand in good faith, saving it from almost certain extinction, and had spent more than $700 million promoting Smirnoff since 1939.19 All Boris and his allies were trying to do, the company argued, was profit from Diageo’s sizable investment and decades of hard work. Furthermore, a schism had developed among Smirnov’s descendants. More than thirty Smirnovs appeared at a press conference in Moscow, questioning Boris’s arguments and charging that his actions threatened the good name of the family.20
In 1999 a U.S. court dismissed Boris’s claims, and an appellate court affirmed the decision two years later. A British panel also considering the matter concluded much the same. It was during this time, too, when Boris’s partner, Andrey, sold his half in their Russian vodka venture to Alfa Group, the giant privately held Russian consortium. Boris was furious and would not recognize the new shareholders. When a new director came to the office at the house by the Cast Iron Bridge in 2000, neither Boris nor a guard would let him in. Representatives from Alfa returned later, this time backed up by armed riot police wearing black masks. Captured on Russian television, the incident resembled something out of an action movie. Police broke through doors and smashed windows while workers inside lobbed bottles of vodka at them. Throughout the melee, Boris refused to leave, according to press accounts, even after his wife suffered a head injury.
Other lawsuits followed over the brand’s true ownership until 2006, when Diageo and Alfa reached a pact. They formed a joint venture to sell and distribute liquor in Russia, including Smirnoff vodka and Diageo’s stable of other spirits. Diageo paid Alfa $50 million and obtained 75 percent ownership in t
he venture.21
VODKA CONTINUES TO hold a pivotal place in Russian society. Vladimir Putin considered resurrecting the vodka monopoly in 2005, not so much to decrease consumption as to fight against the destructive nature of low-quality, illegal alcohol production. Recent official estimates suggest that more than one-third and as much as almost two-thirds of the vodka sold in Russia may come from illegal producers. At a time when the country’s population is in decline and life expectancy rates are slipping, alcohol’s economic and human toll on Russia’s citizens is all the more disheartening. Some thirty-three thousand Russians died in 2006 due to alcohol poisoning, according to the state’s most recent data, and many more succumbed to illnesses related to alcohol consumption.22 Still, Putin’s call for another vodka monopoly to replace a hefty excise tax fizzled in 2007, ensuring that the hunt for a lasting solution to this centuries-old conundrum will go on. As it was during the time of the tsars, Russia’s current economic, political, and social landscape cannot escape vodka’s long shadow.
Resolution, though, in a sense, has come to at least one of the Smirnovs. Vladimir Petrovich Smirnov, the son most responsible for shepherding the family’s heritage through the revolution and beyond, has found a measure of justice and peace. In 1993 his granddaughters arrived in Nice from Moscow to find his unmarked grave. They erected a tombstone on the site. The epitaph reads: IN HONOR OF VLADIMIR PETROVICH SMIRNOV 1875–1934. A VODKA MANUFACTURER, CITIZEN OF RUSSIA. It was, finally, as it should have been.
Acknowledgments
I wrote this book because I had to. There was no choice for me. Once this little corner of nineteenth-century Russia grabbed me, I was lost to it. Many others, however, did have choices and joined me anyway. I will forever be grateful to them. My skillful editor, Ben Loehnen, offered unwavering support from the first moment. He demonstrated superb instincts on every matter that came before him and, even more amazing, he managed to keep my neurosis in check. He also happens to be a very nice guy. Thanks, too, to Matt Inman for his prompt responses to my many queries, and to Richard Ljoenes for his incomparable artistic flair. My unflappable agent, David Black, deserves an abundance of credit for his judgment, loyalty, and relentless drive for editorial excellence. An author could have no better advocate.
The King of Vodka Page 33