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Monday, May 12, 2008 Updated at 12 May 2008 1:11 Moscow Time

The Moscow Times » Issue 3896 » Business

Sergei Rasulov/Reuters

Arslan Ganiyev, the chief engineer at the Russian Whisky distillery, showing off a bottle of his brew in Dagestan.

Dagestani Firm Tries Hand at Whisky

06 May 2008By Dmitry Solovyov / ReutersForget the bagpipes and misty island distilleries: a Russian company is betting it can create a whisky to compete with Scottish imports and even lure vodka lovers away from their national drink.

The unimaginatively named Russian Whisky comes from an unlikely source: Dagestan, best known for its fatty lambs, oily brandy and Islamist rebels fighting a low-level insurgency against federal forces.

Alibek Irazikhanov, director general of the firm Russian Whisky, said none of that was a problem.

"[Our] spring water is great, no worse than in Scotland," he said.

"They are Highlanders, but we too live in the mountains," he said in a telephone interview.

"Three years ago, we spent about three months in Edinburgh, borrowing local experience ... and we didn't only savor whiskies," he said.

While vodka is still the country's national drink, the booming economy has encouraged more affluent consumers to try expensive imported spirits, which are now common both in bars and on supermarket shelves.

"There is a sea of whiskies in shops, flowing in not only from Scotland and Ireland but also from Canada, India and Poland," Irazikhanov said. "Our task is to make high-quality, affordable whisky, cheaper than imports."

Irazikhanov says Russian Whisky, which is funded by unidentified Russian businessmen, can draw on local barley and wheat and local production facilities.

This year, 200,000 liters of single malts, grain and blended whiskies will be sold from the distillery at wholesale prices of 200 rubles to 250 rubles ($8.50 to $10.50) per bottle.

The chief engineer at Russian Whisky, Arslan Ganiyev, has been involved in wine making for more than 30 years.

"We are not like vintners bringing in foreign alcohol to resell it and rake in cash," Ganiyev said by telephone from the distillery outside Kizlyar, some 1,600 kilometers south of Moscow.

"We are the first in Russia to launch full-cycle whisky production, from raw materials to bottling."

Casks once used to mature port and Madeira sherry now hold Russian whisky, Ganiyev said. Full casks of lighter American oak are stored nearby.

Vodka, drunk in a gulp with salty, spicy and fatty food, remains the country's most popular drink.

But whisky imports jumped by 160 percent last year and sales reached 11.7 million liters, according to official statistics.

The Kizlyar distillery says that depending on demand, it can easily raise annual production to 1 million liters or more in a couple of years, and the maturity of its stored whisky will rise every year.

One challenge is whether it can persuade drinkers to enjoy sips of whisky in a country whose drinking culture sees downing a glass of rough moonshine in one gulp as a sign of manliness.

"Russia has yet to acquire a taste for whisky, we have yet to educate our consumer," Irazikhanov said. "Of course, you normally don't drink liters of whisky, as you do in the case of vodka, but why not, if our people can do it?"