China examines official spending on luxury alcohol amid market rebound
Party members asked to report all spending on premium spirits and name officials who attended lavish banquets
China’s disciplinary watchdogs are examining official spending on luxury alcohol as President Xi Jinping steps up an anti-corruption campaign, just as manufacturers of premium spirits are regaining momentum after an earlier crackdown.
The Communist Party is asking local cadres to identify all the illegal spending on luxury liquor from January to August, including how much officials have spent and the names of those who attended banquets that included luxury alcohol, according to notices published on government websites.
Sales in China’s premium spirits segment were hit hard after 2012, when Xi’s signature anti-corruption campaign focused on officials’ lavish spending on entertaining. However, the impact of the latest push may not be significant, as makers of the most popular luxury brands are seeing a surge in consumption in the mass market and the economy is showing signs of strength.
“The demand for premium liquor is very strong now in China, mainly from family and friend gatherings, and normal business needs,” said Qi He, a Shanghai-based fund manager at Huatai Pinebridge Fund Management Co. “The sales contribution from government consumption has reduced from more than 50 per cent years ago, to less than 20 per cent now.”
