Chivas Regal owner bets US$150 million on a whisky distillery in China’s Emei mountains, seeking to convert baijiu drinkers to malt
- Pernod Ricard, the world’s second-largest wine and spirit maker, owns such whisky blends as Chivas Regal, Royal Salute and Ballantines, as well as single malts such as The Glenlivet, Longmorn and Aberlour
- The bet in China follows the growing popularity of single malts by Japanese and Taiwan distilleries, which have topped global awards and won a loyal following by the world’s whisky aficionados
The Paris-based conglomerate, which has been growing cabernet sauvignon and merlot grapes in China for its Helan Mountain Xiaofeng wine since the 1980s, is setting up a distillery in the Emei mountains in Sichuan province.
“We want to go to the next level of development in mainland China by making a brand new iconic malt whisky in China,” said Pernod Ricard Asia’s chairman Philippe Guettat, in a telephone interview from Emeishan, where the company broke ground on a distillery that will open in 2021. “Mount Emei is the ideal location for its high quality of water and climate.”
The French company is increasing its bet on China – Pernod’s second-largest global sales market after the United States – as alcohol consumption is poised to increase in the world’s most populous country. Pernod’s portfolio of whiskies include such blends as Chivas Regal, Royal Salute and Ballantines, and single malts The Glenlivet, Longmorn and Aberlour.
The bet in China follows the growing popularity of single malts by Japanese and Taiwan distilleries, which have topped global awards and won a loyal following by the world’s whisky aficionados.
“There has been an increasing popularity of Asian whiskies, [with] whiskies distilled in Japan, Taiwan and India gaining popularity in the international market,” Guettat said. “It is the right time to make a Chinese whisky and sell it to the world.”
The Emeishan Malt Whisky Distillery sits on 13 hectares of land in a range that’s considered one of the four sacred mountains in Chinese Buddhism. Neri&Hu, the Chinese architects behind the New Shanghai Theatre, have been hired to design the distillery, including a visitor centre to receive up to 2 million visitors in the first decade.
The whiskies produced in China, which will be ready to drink by 2023, will be sold in the domestic market, and be exported, said the executive, whose company had €8.978 billion (US$9.95 billion) in 2018 sales. The ambitious plan is not shaken by the year-long US-China trade war, Guettat said.
“We have been in mainland China for almost 40 years, and we have very long-term plans in the country,” Guettat said. “When the whisky is ready to drink in 2023, it will be some years later, which means the trade relationship between China and the US would be different from now.”
For now, baijiu still dominates distilled liquor consumed in China, with at least 1,000 distillers producing over 10,000 varieties of the spirit. Kweichow Moutai, the alpha distiller, is the world’s largest distiller by market capitalisation, valued at 1.38 trillion yuan (US$192.55 billion).
The value of imported spirits rose 38 per cent in 2017 to a record US$807 million, according to the China Association of Imports and Exports for Wine and Spirits.
Pernod also owns Havana Club rum, Beefeater gin, Malibu liqueur, Ricard pastis, Mumm and Perrier-Jouët champagnes, and wine by Jacob’s Creek, Brancott Estate, Campo Viejo and Kenwood.
