By Jim Boyce | While the top baijiu brands might be little known outside of China, they and the companies that own them are of immense value due to the sheer size of the local market. Case in point: Moutai overtook Diageo this month as the world’s most valuable liquor firm, with respective market capitalizations of USD72.7 billion (Shanghai Stock Exchange) and USD71.5 billion (New York Stock Exchange). Reports the Nikkei Asian Review:
Moutai is now one of the top 10 companies on the SSE by market capitalization, alongside state-owned giants such as Bank of China, Sinopec and China Life Insurance.
For comparison, Moutai is now worth more than Japan’s KDDI, South Korea’s Hyundai Motor and India’s Tata Consultancy Services, and is twice as big as Thailand’s leading company, PTT.
It has been a remarkable comeback for a company that saw both sales and share price plunge after Chinese President Xi Jinping imposed a strict anti-corruption campaign in 2012.
You can see other coverage of Moutai’s taking top spot in China Daily and Bloomberg. The South China Morning Post listed the top ten alcohol firms by market capitalization, with Wuliangye (fifth), Yanghe (sixth) and Luzhou Laojiao (ninth) joining Moutai (first). Fortune reports that Moutai is aiming at revenue growth of 15 percent this year:
Moutai’s 2017 revenue growth goals—which incorporate a volume sales target of 50,000 tons of liquor, according to a company statement—are bolstered by indications that Chinese consumer preferences are shifting to more expensive drinks. The company’s profits have continued to grow even as it has raised wholesale prices.
Last year, Brand Finance ranked Moutai as the world’s number one spirit, edging Johnnie Walker, with baijiu also the number one category:
For the first time baijiu now accounts for greater brand value share than any other spirit type, after a surge in brand value saw the Chinese spirit overtake whisk(e)y for the first time.
In 2016, baijiu accounted for 23 per cent of the total brand value according to Brand Finance’s top 50 drinks, behind whisk(e)y on 37 per cent. But a sharp increase in baijiu brand value in 2016, saw its value increase to 37.5 per cent, while whisk(e)y fell to 28 per cent.
Yanghe (third), Luzhou Laojiao (sixth), Wuliangye (ninth) and Gujing Gong Jiu (14th) all ranked in the top 20, joining the like of Jack Daniels, Bacardi, Smirnoff, Chivas Regal and Jameson.
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Founded in 2015, World Baijiu Day is held each August 9, with events in over 60 cities so far. Follow WBD on Facebook, Twitter and Instagram. And get in touch via spirit (at) worldbaijiuday.com.
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