Bottom line: Wuliangye’s new tie-up with Brown-Forman continues its drive to diversify and create new products for younger consumers, which could help it emerge as a leader when liquor makers emerge from their current downturn.
Brown-Forman links with Wuliangye
It’s not often that I get to write about foreign company involvement in China’s traditional liquor industry, which is largely closed to overseas investment and is also quite fragmented and filled with pitfalls due to dominance by local interests. So I was quite excited to read a new report saying Brown-Forman (NYSE: BF-B), a major US liquor maker whose brands include Jack Daniels whiskey, has teamed up with leading Chinese spirits maker Wuliangye (Shenzhen: 000858) to develop new products for emerging markets. Read Full Post…
China’s homegrown traditional liquor industry has been plunged into turmoil over the last 18 months, and now the shakeup may have claimed its first victim with word that Jiugui Liquor (Shenzhen: 000799) is retreating from the national market. Of course the big question will be whether other makers of baijiu, the traditional Chinese liquor, will follow Jiugui’s lead, and whether Jiugui itself will survive as an independent company. I suspect the answer is that some limited and much-needed consolidation will finally begin to occur in this crowded and money-losing sector. But the process may be difficult, since regional stakeholders will be reluctant to give up control of liquor brands that are often closely tied with the identities of many smaller cities and towns throughout China. Read Full Post…
The following press releases and media reports about Chinese companies were carried on June 24. To view a full article or story, click on the link next to the headline.
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Mobile Subscriber Growth Continues Unbalanced In May At Big 3 Telcos (Chinese article)
China’s Fosun (HKEx: 656) To Invest In Robinov’s Studio 8 (English article)
Baidu (Nasdaq: BIDU) To Launch TV Gaming Platform – Source (English article)
BMW (Frankfurt: BMW) Extends Joint Venture With Brilliance China To 2028 (English article)
Jiugui Liquor (Shenzhen: 000799) Retreats To Home Base, Limits Area (Chinese article)
It’s been nearly a year since makers of the traditional Chinese liquor called baijiu were hit by a double-whammy created by a food safety scandal and a Beijing crackdown on lavish government spending, sending the sector into a prolonged winter. Media are focusing on this one-year anniversary to chart the recent woes of top names like Moutai (Shanghai: 600519) and Wuliangye (Shenzhen: 000858) and talk about what they can do to turn things around. My view is that these companies are in dire need of an image makeover, which should include development of newer, lower alcohol products and major marketing campaigns targeting a generation of younger professionals in major cities. Read Full Post…
