The Pernod Ricard giant announced the decision, clearly linked to Western sanctions against Moscow, late last week.
“We will also cease the distribution of our portfolio in Russia, a process that we anticipate will take some months to complete,” it said in a statement.
Pernod Ricard’s worldwide subsidiaries include the Yerevan Brandy Company (YBC), Armenia’s largest brandy maker and wholesale buyer of grapes. The YBC could not be reached for comment on Friday.
The Russian news agency TASS quoted an unnamed YBC source as saying that the company is continuing brandy shipments to Russia for now. The source did not elaborate.
“I have not yet received official information, but it seems official: the Yerevan Brandy Company will stop its exports to Russia,” Armenian Economy Minister Vahan Kerobian told lawmakers on Thursday.
Most of the brandy produced by YBC and other Armenian firms is exported to Russia. These exports reportedly totaled $180 million in 2021.
According to Avag Harutiunian, the head of the Armenian Union of Winemakers, YBC has accounted for roughly one-third of grapes grown in the South Caucasus country and purchased by local producers of wines and spirits.
“There will now be very serious tensions in our market,” Harutiunian told RFE/RL’s Armenian Service.
“We have to wait and see what the situation will be,” Kerobian said in this regard. He acknowledged that Pernod Ricard’s decision will have an adverse impact on Armenian grape farmers.
The minister promised that the Armenian government will mitigate the anticipate fallout. But he did not specify concrete steps that could be taken by the government.
Other Armenian brandy makers already cut back on grape purchases last year, sparking protests by their suppliers. Some of those grape farmers said last fall that they will have to cut down their vineyards.