People from South China like to drink foreign spirits, just like the people in North China like Moutai (a leading luxury brand of the traditional Chinese liquor baijiu). [Photo provided to China Daily]

New year looks rosy for spirits and wine dealers

As the catering industry laps up what appears to be the entree in an upswing in business for which it has had a growing appetite for many months, one sign that this is no flash in the pan is surging sales of liquors.

Along with turnover in upmarket restaurants, sales of liquor have been particularly hard hit since the central government's austerity campaign began three years ago, but one of the standard bearers of high-end liquors, Cognac, has produced spectacular results this year.

Shipments of Cognac to China jumped 42 percent in the first nine months of the year, the industry association, the Bureau National Interprofessionnel du Cognac says.

But the good news for the liquor industry does not end there. The Scotch Whisky Association has also been trumpeting the fact that imports to China in the first half of this year rose 30 percent compared with the corresponding period last year, to 7 million bottles. Those sales were worth 22 million pounds ($32.7 million), almost 46 percent more than in 2014.

It is not only liquor sales that have been giving the industry reason for festive-season cheer. In October a little more than 32 million liters of wine were imported into the country, 20.6 percent more than in October last year, and whose value was nearly 35 percent higher than in 2014, the commercial think tank Grandview says.

Frederic Noyere, managing director of LVMH-Moet Hennessy Diageo China, says the Chinese government's drive against corruption has served to bring normality to the liquor market, and that has been good for the industry.

Tremendous potential

China, as the world's second-largest economy, continues to hold tremendous potential for Cognac, he says, particularly because of the emergence of the middle and upper-middle classes.

"China remains a fantastic market in terms of opportunity, given its size, its growth, its population, its wealth, and given the fact that Chinese are very fond of high-quality products."

Hennessy accounts for 45 percent of the Cognac market worldwide, and China is the No 2 market for Hennessy in value after the United States, and for a brief period in 2011 and 2012 held the top spot.