China’s drinks industry registers bullish growth in H1

China’s alcohol industry recorded strong growth in the first half of the year across its three main categories – baijiu, beer and cocktails – with baijiu leading the pack, despite an average increase of 72% in its retail price during the period.

It is an indication of the country’s blistering demand for baijiu, the country’s sorghum and grain-based liquor, that even when prices double or triple on online platforms sales continue to be strong.

Kweichow Moutai, arguably the best known brand within China, has raised the suggested retail price of its flagship brand, ‘Flying Fairy’, to RMB 1,499 (US$221), from RMB 969, yet demand still outstrips supply, and the Guizhou-based distiller is on the risk of running out, Bloomberg has reported.

From January to June, sales of baijiu by value grew by 38.5% year-on-year to RMB 1.94 billion (US$286.5 million), largely a result of 72% average price increase, while its sales volumes dipped by 19.52%, according to the latest overview on the country’s beverage industry.

The liquor however is mostly consumed domestically, though there are growing efforts from Moutai and other brands pushing for overseas market in countries such as the UK, Australia and South Africa.

Sales of beer in the first half of the year were also brisk. Revenues grew by 34% to RMB 570 million (US$84 million), thanks to the World Cup and higher demand in summer. Sales from Budweiser and Harbin beer are singled out in the review for notable increases.

Canned and bottled cocktails in the country saw a sharp sales increase of 56.6% in June.

Wine sales are not disclosed in the report.

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