Russian distillery Kristall and Germany’s Jägermeister sue each other for damages

Russia | Jägermeister is one of the most popular bitter liqueurs in the world. Since the German firm stopped exports to Russia, a local imitator has been trying to step into its place. The two firms – Germany’s Mast Jägermeister and Russia’s Kaluga Distillery Kristall – have been embroiled in a bitter legal dispute, with both companies suing each other for damages.

There is a power struggle raging over who controls the Russian market for herbal liqueurs, which kicked off after the German firm from Wolfenbüttel in Lower Saxony, ceased exports to Russia following the invasion of Ukraine. The popular liqueur would have disappeared from shelves once stocks ran out.

Kaluga Distillery Kristall (“Kristall”) apparently decided to step in and take advantage of the newly created gap in the market by launching two herbal liqueurs of its own in the autumn of 2022: Alter Heiler and König Heiler.

These two products not only share a similar recipe with Jägermeister, the bottles look uncannily like the real thing too. Kristall even boasted that it would displace Jägermeister in terms of market share in 2023.

According to Russian media, Mast Jägermeister then asked wholesalers and retailers to stop selling Kristall’s herbal liqueurs in December 2022. This called the Russian anti-monopoly authority to the scene, which, to the German’s surprise, did not reprimand Kristall but Mast Jägermeister. Apparently, the German company had slandered Kristall’s products as "counterfeit". However, this was not the case at all.

According to the Russian news agency Interfax, Kristall filed a complaint with the same authority, complaining that a foreign firm was putting pressure on distributors to ban it from producing its own herbal liqueur in Russia.

Tit for tat

Per the Russian news agency Interfax, the dispute reached the next stage of escalation a few weeks ago when Mast Jägermeister submitted two lawsuits against the distillery and various retail chains at a Moscow arbitration court, claiming a total of RUB 500 million (USD 5.5 million) in damages. The case is to be heard in court in July.

The Russian distillery responded with a counter suit, demanding some RUB 500 million in compensation. After all, the Germans have spoilt its profit prospects. This lawsuit has already been dismissed, reports said.

Parallel imports should be banned too

Although Mast Jägermeister has long since stopped exports to Russia, the liqueur is finding its way into the market via parallel imports by third-party importers. As Interfax reports, Kristall is trying to prevent that too. In a letter to the government, the company asked to prevent parallel imports.

"With their actions, Mast Jägermeister SE not only materially and reputationally harms our company, it also prevents the supply of the Russian market with domestic products, the reduction of retail prices and the creation of new jobs in Russian regions," Interfax quoted from the letter.

Whether the Russian copycat liqueur - in the meantime the label has been changed to look less like the German original - will soon be widely available in Russia thus remains to be seen.

Located in Obninsk, Kristall is a manufacturer of alcoholic beverages with a total production capacity of 120 million bottles per year. It also serves as a contract bottler. On revenues of RUB 2.179 billion (USD 24 million) in 2022, Kristall made a net profit of RUB 115 million (USD 1.3 million), it was reported. The beneficiary of the company is Pavel Pobedkin, 42, who serves as Kristall’s chairman.