Business / Companies

Moutai to make Russia's rich tipsy

By WANG ZHUOQIONG/YANG JUN (China Daily) Updated: 2015-10-16 08:18

China's top liquor brand, widely reported to have been sampled by Russian presidents Boris Yeltsin and Vladimir Putin on their visits to the country, is about to make its debut in Russia.

Moutai, produced by Guizhou-based Kweichow Moutai Co, will be sold in stores there for the first time, priced at around 900 yuan ($142) a bottle, the company said in Moscow on Monday.

The product is a high-proof fermented spirit made from sorghum and other grains, and one of a group of drinks collectively known as baijiu in China.

Kweichow Moutai is seeking to expand abroad as President Xi Jinping's crackdown on corruption and extravagance has curbed demand for luxury goods at home, including top brands of baijiu.

Russia's drinking culture is similar to China's, with an emphasis on fiery drinks, said Kweichow Moutai's president Yuan Renguo at a presentation in the Russian capital, although the company refused to give a date for its launch.

Sales of vodka and liquor in Russia fell 6.4 percent from a year earlier in January through August, according to the state statistics service. Real incomes also declined because of a weakening rouble and the worst recession in six years.

But drinks analysts said with 92,000 dollar-millionaires in the country, according to Credit Suisse's wealth report, they were hopeful that as a premium product, Moutai should be successful in Russia despite its slowing economy.

Vadim Drobiz, head of Russian market researcher Ciffra, told Bloomberg: "Moutai is a premium drink for wealthy people-for such a niche product, its timing of entry into a market doesn't make much difference."

David Zhang, senior drinks analyst of Mintel Group Ltd, a United Kingdom-based consulting firm, said there is strong potential for baijiu in Western markets, in particular among so-called Millennials interested in drinking foreign and exotic brands, who tend to follow "East meets West" trends.

"The key question is who they would target as an audience for their baijiu products," said Zhang. "It could become a niche choice among those trendy young consumers and high income Westerns looking for the next big thing. However, baijiu could take a decade to become anything like mainstream," he said.

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