Diageo has moved to bolster its presence in China with the acquisition of a minority stake in local spirits group Sichuan Chengdu Quanxing Group Co.
The UK drinks giant said today (12 December) that it has snapped up a 43% stake in Quanxing for an undisclosed sum. Pending approval from the Chinese government, Diageo and Quanxing plan to set up a joint venture to develop their footprint across the country.
Diageo plans to help distribute Quanxing's spirits stable throughout China, a portfolio that includes the super-premium 'bai jiu' brand Shui Jing Fang. Quanxing will help Diageo in sourcing packaging for its products on sale in China.
Diageo has been linked with a number of Chinese spirits groups in recent months and is believed to have held a series of low-level talks on possible co-operation.
The company said: "We think that we have the best possible partner in Sichuan Quanxing, through which to deepen our commitment to the Chinese market. Quanxing's understanding of the Chinese white spirits industry and their knowledge of brand building is shown by the success of their super-premium 'bai jiu' brand Shui Jing Fang."
Diageo is also aiming to help promote the Shui Jing Fang brand outside China with markets in Asia the first target.
