China's best-selling spirit Baijiu seeks a foothold in the West

Tue Jun 3, 2014 9:08am EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Leslie Gevirtz

NEW YORK (Reuters) - Just as Russia has its vodka, Mexico its tequila and Scotland its Scotch, China has its own distilled spirit, baijiu.

Baijiu is the world’s biggest-selling spirit category and represents a $23 billion market, according to research reports by McKinsey & Co and UBS.

But baijiu producers are seeking new markets in the United States and Europe as sales fall at home after a crackdown on wasteful spending in China.

The Chinese white spirit distilled from sorghum, wheat or rice, alone accounts for more than one third of all the spirits consumed in the world because China is the leading spirits-consuming nation, according to International Wine and Spirits Research.

Baijiu Moutai is China’s official drink. It is served at state diners and often used as a luxury gift. Produced by Kweichow Moutai Co Ltd, this baijiu can trace its history to the first century BC and was served to U.S. President Richard Nixon on his 1972 visit to China.

But China’s president Xi Jinping banned red-carpet receptions and boozy military banquets last year in an anti-corruption campaign. As a result, sales are down.

The brand was worth nearly $2.4 billion, surpassed only by Johnnie Walker Scotch, according to consulting firm Brand Finance. A 375 ml bottle sells for $160.

Baijiu “represents respect. It represents tradition. It represents wealth, ” explained Yuan Liu, a top executive at U.S. baijiu importer CNS Four Seasons Trading. He, and Manny Burnichon of Private Cask Imports, have embarked on expanding the U.S. market for the clear spirit drink beyond the nation’s Chinatowns.   Continued...

Moutai Liquors is seen on a shelf at a supermaket in Xuchang, Henan province, January 19, 2014. REUTERS/China Daily