China’s Moutai signs ‘historic’ agreement with WSTA

The world’s most valuable liquor brand Kweichow Moutai has signed an “historic” agreement with Britain’s Wine and Spirit Trade Association (WSTA), making its most ambitious move yet to expand its overseas footprint, as the UK becomes one of its fastest growing overseas markets.

Yuan Renguo, chairman of Moutai, and Miles Beale of WSTA

The agreement signed by WSTA chief executive Miles Beale and Yuan Renguo, Chairman of the Kweichow Moutai Group, aims to create a blueprint to build a strategic, cooperative partnership between the two industry leaders, according to the WSTA.

Although the grain-based liquor Baijiu is largely consumed domestically, the UK has become of Moutai’s fastest-growing international markets, according to Yuan.

“Over the last few years the China-UK friendship has continued to warm with the efforts of the leaders of both countries – welcoming a golden era of China-UK relations. This has had a direct impact on increasing our trade relations: sales of British products, such as Scotch whisky, continue to grow in China; Moutai and other Chinese liquor brands continue to increase sales in the UK,” said Yuan at the Guizhou Trade and Economic Cooperation Conference held in London.

In 2017, Moutai Group exported 17.5 tons of Moutai liquor to the UK, generating nearly £2.5 million sterling in revenue, making it one of Moutai’s “fastest growing international markets,” Yuan stressed.

Since China launched the “Belt and Road” Initiative, Moutai has carried out large-scale brand promotion activities globally in Germany, South Africa and other countries along “Belt and Road” route. The company expects to increase its overseas sales to take up to 10% of its total sales by 2020, said the executive.

Meanwhile, Moutai is planning to set up five offices around the world, and start the construction of an international marketing network to promote Moutai liquor to different cultural backgrounds. 

“Strengthening ties with countries outside the EU is a key priority for WSTA. By working closely with the wine and spirit industry colleagues, across the globe, together we can better advise politicians on the benefits of free trade deals and how to avoid unnecessary barriers for the free flow of trade,” said Beale. “The agreement of understanding with Moutai and the coming together with politicians from both countries shows the keenness to collaborate and build industry partnerships.”

Jonathan Driver, Wine and Spirit Education Trust (WSET) Trustee and a member of Worshipful Company of Distillers was also present at the signing ceremony.

The WSET already runs a course out of Moutai’s privately funded not-for-profit university in China, and its hope is the visit will strengthen ties and create further opportunities to grow wine and spirit education courses between the UK and China.

The fiery Baijiu liquor from Moutai is famous for its complex flavour and purity. Current land controls in the province means the company won’t be able to produce more than 60,000 metric tons of its Baijiu annually.

In the face of production limits, Moutai is keen to find opportunities outside of China to expand its operations, according to WSTA.

In 2017, Moutai Group saw its annual sales revenue hit $12.1 billion, profit top $6.4 billion, and revenue exceed $4.1 billion.