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