Fordham Law


Student's Book Review Featured in Wall Street Journal

May 14, 2009

WALL STREET JOURNAL

Spirits Rising
The czar preferred Pyotr Smirnov's vodka. Eventually the world did too.
By JOSEPH TARTAKOVSKY

In 1831, Pyotr Smirnov was born to illiterate Russian serfs in a village so remote that walking at night required clanking metal sticks together to scare off the wolves lurking at forest's edge. But he had ambition and intelligence. As a teenage apprentice to an innkeeper- uncle in a nearby town, he observed the mechanics of pricing and supply. In his 30s he set up shop himself as a small-time liquor peddler. By 1886, he was selling two-thirds of Moscow's vodka. Soon he was purveyor to the czar, presiding over a company whose product saturated the vast Russian empire.

In "The King of Vodka," Linda Himelstein shows how Smirnov pulled off his commercial coup and founded a company that, in one form or another, exists to this day. Force of personality had something to do with it -- Smirnov was a "tall, dashing man with a commanding presence." Before his death in 1898 he demanded that, upon his burial, prayers be said for him in 40 churches for 40 days -- the period during which, according to Russian Orthodox doctrine, God chooses the soul for heaven or hell. Smirnov, Ms. Himelstein says, never left matters to chance. Besides, the nature of his trade gave him reason to worry about his soul's fate.

Vodka was invented in Russia by medieval monks, but it has always had a most unholy effect there. It became essential to "wet the bargain" between merchants, bribe soldiers, pay wages, insulate bureaucrats against frigid mornings or help peasants endure their misery. Throughout the 19th century, vodka taxes averaged 30% of the state budget. Chekhov, who treated alcoholics as a doctor, called vodka "Satan's blood."

So sodden was the Russian citizenry that anti-vodka crusades became a part of political platforms. One parliamentarian enlisted Tolstoy himself to design a bottle label to fight drunkenness. The aging writer suggested a skull and crossbones and the word "Poison." The Duma supported the label, but the czar's ministers intervened; it would cripple their finances. Temperance reforms were thus always half-hearted. One campaign urged hardened drunkards to try the softer refinements of tea rooms. Even Czar Nicholas II guzzled two wineglasses of vodka during lunch. Vodka-drinking, says Ms. Himelstein, was simply "Russia's great pastime."

When Smirnov struck out in the 1860s, the concept of marketing was virtually unknown: He proved to be a pioneer. To reach aristocrats, he hustled to win prestigious taste prizes in Vienna and Paris. He was among the first manufacturers to place newspaper ads in Russia, and he learned to make strategic "charitable" contributions to clergymen so that they wouldn't inveigh against his livelihood.

Other tactics were more primitive. One day he went to the Khitrov market, the "saddest spot in all Moscow," and invited 15 men to his house. "Beginning this day," he told them, "you will drink and eat as much as you want on my treat." In return they were to fan out to local inns and demand his vodka. If told it wasn't carried, they must "complain loudly" and shout: "How it is possible that your respected establishment does not have such a vodka?" The strategy worked, and orders poured in -- or so the story goes. In the 1870s, Ms. Himelstein tells us, Smirnov dodged the waves of labor strikes by giving his workers the industry's best wages and fewest hours.

As for the vodka itself, it seems, under Smirnov's immaculate care, to have been superb. The key to making vodka is the quality of ingredients (wheat or rye, water, et al.) and the process of distillation. According to Ms. Himelstein, Smirnov was obsessed with the purity of his water and the freshness of his fruits (for flavored vodkas) and insisted on using his own hydrometer to perfect the water-alcohol ratio. Connoisseurs loved the result, and so did the masses.

"The King of Vodka" is partly a founder's biography and partly a colorful chronicle of the rise of a business. Ms. Himelstein, a veteran journalist, keeps her narrative moving neatly along, distilling complex matters of commerce into a clear and readable form. She uncovers striking facts, some as recondite as the number of seconds it took wayfarers to bypass Moscow's border guards ("probably less than 20").

Particularly interesting is her account of the business climate in late imperial Russia -- incipient capitalism groaning under feudal statism. Merchants were ranked into three classes. Members of third class, for instance, were allowed only 32 workers and one horse for their carts. First-class industrialists could wear rapiers and send their children to elite schools, but even they had to petition bureaucrats for permission to do things like expand their governing boards. One only wonders if Ms. Himelstein doesn't describe Smirnov, apparently a devout and honest man, as too honest. Is it possible that a titan of industry, operating amid imperial corruption and cutthroat competition, could adhere so unfailingly to what Ms. Himelstein describes as an almost noble sense of fair play?

Certainly his playboy sons didn't. Feuding, gambling, pursuing dark-eyed opera starlets -- all the great destroyers of family fortunes marred their lives, and whatever company assets remained were seized in 1917 by the Bolsheviks. One son, Vladimir, escaped to Nice, France, and began licensing the famous surname. In 1933, a man named Rudolph P. Kunett struck a deal to bring vodka to American shores. At first the "white whiskey" didn't take with Americans, patriotically suspicious of any non-bourbon, but after World War II vodka took off, in part because a flavorless liquor mixed easily in the cocktail culture of the day.

In the 1970s vodka surpassed gin and bourbon as America's top-selling spirit, and today Smirnoff, owned by British giant Diageo, is the world's best-selling brand of alcohol. Recent lawsuits by resentful Smirnov descendants -- they argue that Vladimir had no right to license the name in the first place -- have failed. A rise, a fall and a rise, then -- but only of the brand. As for the superb quality that first made it famous, personal experience suggests that it's long gone.

Mr. Tartakovsky is a student at Fordham Law School in New York.

Website: http://online.wsj.com/article/SB124226917042118265.html