British drink giant Diageo Plc’s baijiu brand Shui Jing Fang drove the company’s growth in China as it is expected to cut market spending on deluxe Scotch in the country. According to its interim results for the year ended Dec 31, its net sales in China increased 4 percent. The performance of Shui Jing Fang continued to improve with net sales up 81 percent. Its marketing spending was down 2 percent as a result of reduced spending on Johnnie Walker Black Label and Blue Label in China…Full Article: China Daily Feb 2016

Key Point

  • According to a 2015 market intelligence report, Chinese net sales of foreign liquor/spirits declined -40% due in part to a -42% decline in Scotch whisky sales.

ChinaAg Comments

  • In 2014, Hong Kong imported 4.2 million liters of whisky and exported ~745,600 liters of whisky to mainland China, equating to roughly an 18% re-export rate. From 2010 to 2014, total re-export volumes averaged 28% of all imports. The United Kingdom was the top supplier of whiskey.
  • In July 2013, the UK-based Diageo Plc, the world’s largest liquor producer by sales, stated it will acquire the remaining shares of Sichuan Chengdu Shuijingfang Group, also known as SJF Holdco, for 233 million pounds ($357.6 million). SJF Holdco is major Chinese producer of baijiu.

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