CHINA: Banquet ban knocks down Kweichow Moutai shares
The military ban also includes red carpets
Kweichow Moutai shares have dropped by 6% since the Chinese military issued a ban on high-level luxury banquets.
The ban, which came into force on 21 December, forbids high-ranking military officials from “indulging in alcohol” on official visits, China's state media outlet Xinhua reported. Luxury banquets, red carpets, floral arrangements and souvenirs have also been outlawed, Xinhua said.
Kweichow Moutai shares today stood at CNY204.28, down from CNY216.52 when the ban started.
Kweichow Moutai makes some of China's biggest-selling rice wine brands, with its premium offerings a favourite with China's ruling class. Rice wine, or baijiu, is an important element at most Chinese functions and receptions.
International firms are trying to tap into the popularity of baijiu, which accounts for 99% of all spirits sales in China. In 2010, Diageo took a controlling stake in Sichuan Chengdu Quanxing Group, which owns 39.7% of baijiu brand ShuiJingFang.
The drinks sector is particularly fertile ground for mergers and acquisition activity, with a number of big businesses accustomed to making acquisitions to spur growth, new players popping up all over...
In a recently-published global briefing 'Diageo in Spirits', Euromonitor International's senior alcoholic drinks analyst Jeremy Cunnington takes a look at what are the challenges facing Diageo in spi...
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