YEREVAN (Associated Press)–The Pernod-Ricard group of France is considering reneging on a deal to buy a century-old Armenian brandy distillery because of economic troubles in Russia–Armenia’s prime minister said Monday.
Russia is the main export market for the government-controlled Yerevan Cognac Distillery–and its economic downturn has crippled sales in recent months.
In May–Pernod-Ricard agreed to pay $30 million for the distillery and invest $5 million in developing vineyards in the former Soviet republic.
Pernod-Ricard recently approached the Armenian government to discuss revising or perhaps abandoning the deal–Prime Minister Armen Darbinian told a news conference.
The distillery was established in 1897. Distillery officials say Josef Stalin presented Winston Churchill with a bottle of its 10-year-old–100-proof brandy during a 1943 Tehran conference–and it remained Churchill’s favorite until his death.
Since Soviet times–Armenian brandy has been called cognac–drawing angry protests from France–which insists its producers have exclusive use of the term.
The sale in May drew street rallies and parliament battles–as many people protested the deal saying the distillery was worth much more.