Campari Group has signed a memorandum of understanding with China state-owned alcohol company Sichuan Yibin Wuliangye Group Co. to collaborate on “strategic” goals.

The deal aims to support “the joint development of both parties” in China and the international spirits market, they said in a statement today (24 November).

The two businesses will work together on NPD, channel expansion, “strengthening marketing cooperation” and “promoting brand culture”, they said.

A Campari spokesperson said the collaboration was in an “early stage” and hoped to “exploit potential” in areas such as marketing.

Campari said: “Together with Wuliangye, Campari will uncover growth opportunities while promoting cultural exchange through spirits, represented by Campari Group’s wide portfolio of western spirits across different categories and Wuliangye’s leadership in Chinese Nongxiang Flavor Baijiu.

“Through this partnership, Campari and Wuliangye not only will introduce consumers in China and abroad to different spirits representing different cultures, but by partnering together, develop and co-create new products for different occasions.”

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Campari told Just Drinks the two companies planned to collaborate in both the on- and off-premise “using the Wuliangye network and knowledge of the domestic market”. They did not expand upon which international markets it might focus on.

“We have particular plans to explore cocktail culture and development of cocktails and spirits, mixing Campari brands [with] Wuliangye,” the companies added.

In September, the two groups launched a marketing initiative in Shanghai to promote the ‘Wugroni’ – a negroni-style cocktail made with Wuliangye baijiu, Cinzano and Campari’s namesake liqueur.

Campari already has a team based in Shanghai, mainly focused on sales across five “core” cities, as well as marketing and brand activation.

Sichuan-headquartered Wuliangye Group owns baijiu brand Wuliangye and paper and ‘forest products’ manufacturer Yibin Paper. In 2019, its sales exceeded 100bn yuen ($13.99bn).

It described baijiu as its “primary business”, while also having interests in ‘smart’ manufacturing, food packaging, modern logistics, financial investment and health and wellbeing. It has an annual production capacity of 100,000 tons of baijiu and a storage capacity of 1m tons.

Wuliangye baijiu, the group’s flagship product, is protected under EU geographical indication regulations. Its pit (where fermentation is done) was built in 1368 and the company said it has been producing consistently for 655 years.

The Shenzhen-listed group said it owns “a large number of fermentation pits that have been utilised uninterruptedly”. Its pits and distilleries are also on UNESCO’s tentative list of heritage sites.

In its last financial report for the nine months ended 30 September 2023, Campari noted “weaker-than-expected [economic] recovery in China” globally but said its brands were still growing there.

“China showed positive overall growth in a volatile market against an easy comparison base, thanks to Skyy, X-Rated, Aperitifs and Wild Turkey Bourbon,” it said.

It added China drove positive organic performance for Skyy vodka in the period, which grew 2.4% in the nine-month period compared to the same period last year.