Interfax-Ukraine in an exclusive interview with Chief Executive Officer of Marie Brizard Wine & Spirits Jean-Noël Reynaud Question:At what stage is the litigation regarding the sale of corporate rights? When do you expect these legal proceedings to end and when will your company be able to focus on its ongoing operation to develop its business in Ukraine? Answer: We are currently expecting the Higher Economic Court to set the hearing on the cassation of our opponents in the case on the bankruptcy of Belvedere-Ukraine. The SEC will take the final decision on the status of the auction sale of our corporate rights (which we consider to be in violation of Ukraine’s Law on Bankruptcy). In addition, we have filed a cassation appeal to the High Specialized Court in the Belvedere Ukraine LLC case against Oleh Taran, Oleksandra Volodymyrska, and Maryna Sinitsina regarding recognition of corporate rights and the recovery of property from unlawful possession. This case concerns the re-sale of our corporate rights by Avigal LLC following the unlawful auction, while the cassation concerns the refusal by the Appellate Court to allow Belvedere S.A. to participate in the hearings as a party. The state liquidator Shcherban O.M. representing Belvedere-Ukraine LLC has actually acted against the company’s interests and withdrew the appeal during the last hearing of the case, which is why we want a fair opportunity to make our case. Unfortunately, it’s difficult to make predictions about the end of the legal proceedings, but we hope that the dispute will be resolved as soon as possible so that we can resume production – and investment in Ukraine. Question: What are your further plans to develop production? Answer: I think it’s too early to talk about further plans at this stage – first we need to restore control over our assets in Ukraine and fully resume production. In other words, we need to make sure, whether Ukraine has begun the transformation into a European state, or remains a lawless jungle, before we commit to further investment. Of course, we hope that justice is served and we resume normal operation soon. However, due to enormous political pressure from our opponents' patron, a Deputy in the Prime Minister's party in the Verkhovna Rada, we cannot predict the outcome, even though we are in the right according to Ukrainian law. What I can say is that we had an established production of our premium brand Sobieski Vodka in Ukraine and also had plans to introduce locally bottled scotch whiskey as well as fruit wines. Question: Does the company import its produce to Ukraine? From which country? Which volumes? Could you please give more details? Answer: No, our business model relies on local production and distribution of our products. We do not currently import into Ukraine and do not have plans to do so for now. The Ukrainian “Sobieski Vodka” you may occasionally find in Ukraine today is a counterfeit product, which is another reason why we want to resolve the legal dispute as soon as possible and protect our international brand’s reputation. Question: How promising is the Ukrainian market for investment under the current conditions? Answer: Ukraine is a country with a large, well-educated population and European integration aspirations. From this point of view, it is a perfect market for us, with incredible potential. However, Ukraine needs ensure the Rule of Law in the country, so that foreign investors, like us, feel that their local assets are safe and secure. If it fails to do that, its potential as a market is essentially wasted. Question: What products do you plan to produce at a plant in Cherkasy? Answer: Prior to the dispute, we were producing our premium brand Sobieski Vodka, and also had plans to introduce locally bottled scotch whiskey as well as an assortment of fruit wines. Question: How much investment does, according to your estimates, the launch of production facilities require? Answer: We have already invested tens of millions of Euros into creating a state-of-the-art production facility in Cherkasy oblast. We currently have no access to our assets and no knowledge of their status – it is highly possible that they are being disassembled and re-sold as we speak. Thus, we cannot make an estimate. Even if we restore control over our assets, we will still need to re-build our distribution network from the ground up. However, MBWS is prepared to continue investing into further development of the plant. Question: How competitive is the market of alcoholic beverages in Ukraine? What segment of the consumers will your produce target? Answer: It is a highly competitive market, but also a very large one with great opportunities for development. Our premium brands target the premium segment, while fruit wines would target the general segment.