Wang Xin was surprised recently by the way his friends, in Shanghai, received him at the dinner table.

They did not offer him white spirits, beer or red wine.

Yellow rice wine was their preferred poison.

"It's like a fashion," Wang said, after he returned to Beijing.

"Before the trip, I had not noticed the mellow aroma of yellow rice wine. It tastes great."

He may soon notice a much greater selection of yellow rice wine on store shelves in Beijing, as wine makers in the Yangzte River Delta are expanding their market into the north.

Several leading yellow rice wine makers from East China's Zhejiang Province recently participated in China Central Television (CCTV)'s prime-time ad bidding war.

"We bid 45.93 million yuan (US$5.53 million). Our goal is to use CCTV as a platform to expand our markets across the Yangtze River," said Lu Jianzhong, vice-general-manager of Zhejiang Zhizhonghe Wine Industry Co Ltd.

CCTV is China's only national television broadcaster.

"We hope our sales revenues will reach 400 million yuan (US$48.19 million) next year," Lu said.

Zhizhonghe's annual sales revenues are currently 100 million yuan (US$12.05 million), Lu said. But they are derived mainly from markets in Jiangsu and Zhejiang provinces.

Zhejiang Gu Yue Long Shan Shaoxing Wine Co Ltd, in much the same thought, had planned to spend 50 million yuan (US$6.02 million) during the CCTV bidding conference, Xu Weimin, the company's vice-general-manager, said.

"That is almost 80 per cent of our total advertising budget for next year. But we expect encouraging results from the markets in northern China - such as Beijing, Shenyang, Dalian and Tianjin - in the near future," Xu said.

Gu Yue Long Shan is China's only listed yellow rice wine maker.

Yellow rice wine, a rich-flavoured liquor with a relatively low alcohol content, is made from either fermented glutinous rice or millet.

The history of making yellow rice wine dates back to the Spring and Autumn Period (770-476 BC).

The most famous yellow rice wines come from Shaoxing, in Zhejiang Province.

China produces 1.6 million tons of yellow rice wine annually. Of that, nearly 70 per cent is consumed in Zhejiang and Jiangsu provinces, and Shanghai, indicates the China Alcoholic Drinks Industry Association (CADIA).

"The yellow rice wine sector has been the fastest-growing sector in China's brewery industry in recent years," said Shen Zhenchang, secretary-general of CADIA's yellow rice wine branch.

Sales revenues within China's yellow rice wine sector grew 15 per cent year-on-year last year, and profit margins rose 22 per cent, year-on-year, Shen said.

"The sector is expected to grow even faster, as large rice wine brewers search for virgin markets outside of the Yangtze River Delta," Shen told China Business Weekly.

The periphery of the delta region, mainly Anhui and Jiangxi provinces, is witnessing a two-digit growth rate in sales revenues annually, Shen said.

"Yellow rice wine will be more welcome, given its nutrition and low alcohol content, as people pay more attention to their health," Shen said.

The market potential for yellow rice wine has drawn investors' attention.

Oishi (China) Co Ltd, a snack food producer, recently entered the yellow rice wine making sector when it acquired a yellow rice wine factory in Shanghai.

Shanghai First Food Holdings Co Ltd, by investing 280 million yuan (US$33.73 million) earlier this month, expanded the annual production capacity, to 100,000 tons, of its yellow rice wine.

China has more than 700 yellow rice wine makers.

The nation exports 20,000 tons of yellow rice wine annually. Japan is the largest export destination, consuming about 50 per cent of China's total yellow rice wine exports.

(Business Weekly 11/30/2004 page8)