CHINA: Wuliangye Yibin warns of change after H1 slowdown - report

By | 15 August 2013

Wuliangye Yibin has warned China's spirits market is going though an adjustment after it posted a slowdown in profits growth in first-half results, according to local reports.

The Sichuan-based firm, which specialises in producing baijiu, saw H1 net profits jump 15% jump to CNY5.79bn (US$947m) in the six months to the end of June, Xinhua news agency reported today (15 August). Sales were up by 3% to CNY15.52bn.

The increase lagged Wuliangye's full-year results when profits climbed by 61%. The company, founded in 1998, blamed “difficulties and challenges” in the market for the slowdown, it was reported. 

clampdown on gifting to civil servants and a ban on alcohol at luxury banquets, introduced late last year, has hit the performance of drinks companies in China, including foreign players Pernod Ricard and Diageo.

According to a survey last month, baijiu will be the worst affected, and producers should brace for a 20% drop in profits.

Expert analysis

Global market review of the travel retail drinks sector

Changing demographics, growing economies, increased disposable income and the rise in international and business travel have all contributed to the burgeoning travel retail sector.

Sectors: Company results, Emerging markets – BRIC, Spirits

Companies: Diageo, Pernod Ricard, Ricard

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