The makers of Russia's best-known brand of vodka have received notice of insolvency, the possible first step on the road to bankruptcy, but officials said output would not be affected.


A Federal Bankruptcy Agency official told Postfactum news agency Thursday: "There is nothing terrible in this either for the firm or for lovers of Stolichnaya."


The notification dealt with liquidity levels at the company, Kristall, but did not mean it would go out of business.


"Nobody is planning to take away Kristall products from vodka consumers, only now they will be produced with our help," the agency official said.


Stolichnaya vodka, with its distinctive red and white label, is popular both in Russia and abroad.


Kristall general director Vladimir Yamnikov confirmed it had received the notification. But he said that the plant was financially sound, although high taxes and duties had taken a heavy toll.


"The financial condition of our enterprise is excellent, but we are only producing one-third of what we can because of all these taxes," he said.


Kristall, which once distilled vodka for the tsars, has faced problems following Russia's transition to the free market.


"They invented a coefficient which says we must have a certain amount of money on our account which must exceed expenses. But we invest the money we earn, it is not lying idle in the account," Yamnikov added.


He said Kristall owed nothing either to its suppliers or to the state and noted that the firm had contributed 100 billion rubles ($50 million) a year to budget coffers.


Yamnikov declined to say what the plant's output was, but Postfactum said Kristall had been forced to cut production to 30 million liters a year from 100 million.


Earlier this year, 700 Kristall workers were given two weeks' unpaid leave after a rise in excise duty led to huge price increases and cut domestic vodka sales.


The government, aware that the price and availability of vodka remains highly sensitive in Russia, backed down and reversed the rise in duty.


Izvestia newspaper said Thursday that the Russian vodka industry was undergoing a major revival, with new factories being built and others being renovated.


"It is shameful but it is a fact: we have only 4 percent of the world market for 'Russian vodkas,'" it said.