World: China’s Kweichow Moutai overcomes Diageo and becomes world’s most valuable liquor company

Chinese alcohol brand Kweichow Moutai, best known for brewing the fiery grain-based drink baijiu, has overtaken Johnnie Walker-brand owner Diageo Plc. to become the world’s most valuable liquor-company, The Financial Times reported on April 10.

Moutai’s market capitalisation reached $71.5 bln on the Shanghai exchange on April 7, while Diageo’s London capitialistion is $71.1 bln. The Chinese company’s share price has soared in the past year as it has seen rising sales from Chinese consumers upgrading to premium brands, and as a culture of business banqueting and gifting has recovered after a fierce crackdown on lavish spending in officialdom.

Baijiu has few fans outside China, and about 95 per cent of Moutai’s sales are from the domestic market. But total baijiu sales values have surged ahead and now account for 37.5% of total global spirits values, according to the Brand Finance’s most recent Spirits 50 report.

Meanwhile, whisky’s value share of the global spirits market shrank from 37 per cent to 28 per cent. More than 90 per cent of Diageo’s revenue was from North America and Europe in the fiscal year to June. Moutai has been able to increase prices, with the retail cost of its Feitian-label rising RMB100 each month for much of last year.

10 April, 2017