Blog: Diageo - Who will buy my baijiu?

Olly Wehring | 31 May 2012

Amongst the sideline talk at this year's Capital Markets Day from Pernod Ricard yesterday, check this, from a China Daily reporter.

Talk over dinner last night turned to baijiu, the domestically-produced white spirit and national drink of China. The category accounts for a staggering 99% of spirits sales in the country, with imported spirits – annual volumes of a still-healthy 5m cases – making up the final per cent.

What was Diageo's thinking in getting involved in baijiu, the reporter asked me. Could the company be keen to grow the Shuijingfang brand in China, or is Diageo looking to introduce baijiu to export markets?

I proffered the possibility that Diageo is hoping to use Shuijingfang as its way in to the Chinese consumer, before looking to turn him on to the likes of Johnnie Walker.

“No,” the reporter fires back. “That will never work.” The baijiu consumer is such, due to a mixture of compulsion and national loyalty, I'm told. A Chinese civil servant, for example, - of which there are a few - will buy baijiu and baijiu alone when it comes to spirits.

I'm hoping Diageo knew this before it made its play for Shuijingfang.

Unless, of course, baijiu's going to get its own gondola end in Wal-Mart and Tesco some time soon?