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. Last Updated: 07/27/2016

An Entrepreneur Values Zhirinovsky at $3M

For MTZhirinovsky, Hero of Our Time vodka
The name sounds like "greasy" and has the ring of virulent nationalist politics -- yet buyers should be prepared to pay a fortune for the brand.

The trademark Zhirinovsky is up for grabs, and the current owner says he wants 77 million rubles ($3 million) for the right to stick the name of the flamboyant and populist politician on a bottle of vodka.

The seller is Moscow businessman Sergei Kuznetsov, who says Vladimir Zhirinovsky, head of the Liberal Democratic Party, gradually gave him rights to use his name on a variety of products beginning in 1994.

"I got it for a symbolic price," he said, explaining that Zhirinovsky did not need money at the time and had wanted his name to become more popular.

The license, Kuznetsov said, was recently renewed for approximately 10 years.

Besides vodka, the products bearing Zhirinovsky's name include cigarettes, aftershave and even mayonnaise.

There also is an extra-rich ice cream called "Zhirik," the popular diminutive form of Zhirinovsky, Kuznetsov said, though it is a separate brand and is not for sale. Zhir in Russian means "fat."

It might seem strange that a viable number of consumers are willing to buy household goods under the name of a boisterous politician who has been involved in sometimes bloody fist fights in the State Duma. But Zhirinovsky, who has been in Russian politics since the early 1990s, is popular, with his party winning 11.5 percent of the vote in the 2003 Duma elections and around 10 percent of the regional vote this spring.

Zhirinovsky declined to be interviewed for this article, but he told Vedomosti recently that he had allowed Kuznetsov to register his name as a trademark in order to avoid abuse. "If businesspeople want to use the brand, they should do without eroticism and exotics," he said, adding that he would not approve of toilet paper or condoms bearing his name.

Kuznetsov said both politics and business would benefit from the sale, coming just months before Duma and presidential elections. "The brand might do well while the elections campaign is under way, and Zhirinovsky would get extra publicity," he said.

The businessman originally advertised eight different trademark classes at differing prices, ranging from perfume at 13 million rubles ($500,000) to soft drinks at 2.8 million rubles. But he said the vodka business was by far the most attractive.

Kuznetsov said he wanted to sell because he was frustrated with the vodka factories and wanted someone to invest in marketing the brand. "You do not earn much with the brand, but money is made from the production," he said, explaining that he received just 88 kopeks (3.5 cents) for each half-liter bottle with a wholesale price of 68 rubles ($2.60). "Producers are not willing to invest in a brand they do not own."

Kuznetsov would not reveal details about negotiations with potential buyers, but said they'd progressed considerably.

So far, Zhirinovsky products are far from bestsellers. The vodka is among the country's lesser-known spirits, and, Kuznetsov said, production runs at 200,000 to 300,000 bottles per month. In the country's highly stratified vodka market, it is positioned in the humble ekonom range. Kuznetsov said that this should remain so: "That is Vladimir Volfovich's electorate -- the simple Russian people."

The Liberal Democratic Party gets a share of the proceeds from sales. So far, however, the party has been receiving royalties not in money but in goods. "We hand out the products as gifts to our supporters whenever we can, to spread our popularity," Vladimir Taskayev, the party's manager for the Urals region of Sverdlovsk, said by telephone from Yekaterinburg.

Competitors in the vodka business said they were not impressed by Zhirinovsky's performance. "This brand has been around for some 10 years now, but it never achieved a prominent position in the market," said Dmitry Dobrov, a spokesman for Kristall. The state-controlled Moscow distillery makes a highly successful brand of vodka called Putinka, which bears more than a slight resemblance to President Vladimir Putin's family name. The brand was introduced in 2003, three years after Putin was first elected.

Putinka and Zhirinovsky, however, have nothing in common, said Stanislav Kaufman, marketing vice president of Vineksim, the distributor for Putinka. "Putinka is a sympathetic nickname, while Zhirinovsky is an exact copy of a family name plus the man's portrait," he said. "I don't want to drink Zhirinovsky as much as I do not want to drink Putin."

Most politicians would be well advised to avoid cashing in on their names, but Zhirinovsky may be an exception.

"He is the archetype of a scandalous politician," said Alexei Makarkin, a political analyst at Panorama think tank.

Igor Tabakov / MT
Zhirinovsky showing off a first bottle of his vodka in the State Duma in 1995.

The art of sticking a family name on a product has also been perfected by several businessmen, including St. Petersburg entrepreneur Oleg Tinkov, who made a fortune with his Tinkoff brewery, and Vladimir Dovgan, who in the 1990s created a small empire of foodstuffs bearing his name. Although the brand has been discontinued in Russia, it is currently selling well in the sizable Russian-speaking market in Germany.

But consumer goods analysts say this is becoming a method of the past. "This worked well in the 1990s, but it won't work today," said Mikhail Terentyev of Troika Dialog.

Brands with prominent family names could sell in markets with low levels of consumer sophistication, typical of the years after the Soviet breakup, he said. Today, buyers are more concerned about lifestyle, health care and the quality of ingredients -- and this is not carried in a family name, he said.

A famous name alone does not guarantee long-term popularity, said Alexander Pismenny, general director of marketing company Nielsen's Russian office.

"Apart from a brand that consumers can associate with, other factors like pricing, distribution and packaging are important for success, too," he said.

From a commercial point of view, however, the timing of the Zhirinovsky sale is just right, said Arseny Soldau, founder of the communications agency Soldis. "Vladimir Volfovich's career has reached its zenith," he said.

Zhirinovsky is about the only prominent Russian politician to have endorsed the use of his name on consumer goods. But that hasn't stopped other companies from following Putinka's lead.

An Astrakhan factory is selling pickled peppers and eggplants under the brand Puin. A sword inserted between the "u" and the "i" makes the word appear to be "PuTin." A German vodka called Gorbatschow is the national leader, say owners Henkell & S?hnlein. "The coincidence did boost our vodka's popularity in the 1990s," a company spokesman said in an e-mail. Former Soviet leader Mikhail Gorbachev never gave approval for the brand -- nor did he have to. The brand was registered in Berlin in 1921 by a Russian emigre named Leontevich Gorbatschow.