Chinese officials banned from profiteering in Moutai

The discipline watchdog in China’s southwestern Guizhou province, hometown of China’s most famous liquor Moutai, has banned officials, their family members and relatives from profiteering from the famous brand ahead of the Chinese New Year Festival.

The directive issued by the Guizhou Discipline Commission singled out the baijiu brand, and bans officials, their spouses, children and their children’s spouses from participating in sales of Moutai or any commercial activities linked to the distribution and procuring of a Moutai business distribution license or any type of business facilitation or change of allocation.

Any violation would lead to regulatory and even legal punishment, according to Chinese media reports.

The brand is arguably the most sought-after alcohol label within China despite its increased prices. A favourite for banquets and gifting, Moutai’s demand has sustained strong growth, but is also often associated in the downfall of corrupt officials.

Guizhou’s former vice-governor Wang Xiaoguang was sacked due to corruption and was reported to have been a heavy drinker of Moutai and often took Moutai as bribes. Additionally, he also illegally owned four stores in Guizhou’s provincial capital selling expensive bottles of baijiu.

In May 2017, another official in Guizhou, Luo Jianqiang, was found to have once pocketed two bottles of vintage Moutai and 24 other bottles of Moutai for official banquets, China Daily reported.

Another Party official in Henan province, Li Xinzhong, was sentenced to jail for 10 years for taking bribes of RMB 5.78 million (US$851,000) including RMB 2.36 million worth of Moutai.

Kweichow Moutai’s net profit last year grew 25%, and its revenue grew 23% to RMB 75 billion (US$11 billion).

Growth for 2019 is projected to be +14% in revenue.