Whiskey sales take great leap forward



February 28, 2005


Good whiskey brands typically take 21 years to mature, and almost the same period of time has been needed for the China market to become ripe for Scotland's most well-known contribution to world culture.

Visit any trendy bar or karaoke club in Beijing and chances are you will see a group of thirtysomethings, men and women, gathered around a bottle of Scotch.

The ever-more hectic nightlife of China's big cities accounts for huge leaps in sales, said Geoffrey Kau, a manager at Riche Monde (China), which distributes the Johnnie Walker brand in the mainland.

``People mix it with green tea and they can easily finish a bottle within an hour,'' he said, sitting next to three cases of freshly imported Black Label.

One-bottle-an-hour karaoke visitors were a main factor helping Riche Monde to double whiskey sales in Beijing to 14,000 cases last year, he said.

Mainland markets also helped boost the global sales volume of Chivas Regal by 12 percent last year, according to the owner of the brand, French wine and spirits giant Pernod Ricard.

``Chivas Regal reported increased sales for all regions, with a spectacular acceleration in Chinese Asia,'' Pernod Ricard said this month.

Industry-wide, market analyst Datamonitor estimates mainland sales last year increased at least 20 percent, possibly twice as much, from 294 million yuan (HK$277.18 million) in 2003.

With growth rates like these, the world's whiskey producers feel compelled to pay increasing attention to the mainland market, even though genuine connoisseurship is infrequent even among sophisticated urbanites.

``They don't really know the taste,'' Kau said. ``They just follow the trend and know it's a popular product to drink.''

The lack of Chinese interest in the culture and history of whiskey is confirmed by tastings of Irish, Scotch and Bourbon organized by Beijing's John Bull Pub. ``Each time, the people who turn up are 95 percent foreigners and just one or two Chinese,'' pub owner Frank Siegel said.

The imported drink of choice for China's nouveaux riches remains cognac, but in the long term it may face a disadvantage, as it is not linked to the youthfulness and energy conjured up by whiskey, according to analysts.

``Cognac in China is associated with very old men drinking it in oak-paneled rooms,'' said John Band, a researcher with Datamonitor, who recently completed a study on the mainland's whiskey market.

Retailers in Beijing also recognized the youngish profile of people who drink whiskey.

``Locals used to stick to vodka, but we see more of them coming to buy whiskey,'' said Lu Wuji, a manager at Jenny Lou's Shop, a popular retail outlet in Beijing. ``They are mostly well-off and in their thirties or forties.''

China is likely to eventually become a much bigger market for imported brands than India.

This is because most whiskey in the subcontinent is indigenously produced, possibly because of influence from the British colonial era.

If the mainland's huge potential were to be fully developed one day, the world's whiskey reserves would simply be depleted.

``For China to reach the level of Scotch whiskey consumption per head seen in Hong Kong and Taiwan, they would need to buy far more Scotch than can conceivably be produced,'' Band said.

All the major distillers should be looking at the mainland, even if they may have to wait for a quarter century to see the market boom in a big way, observers said. ``In 25 years, when the people who are currently moving from poor to middle income move to high income, that's when Scotch is really going to take off,'' Band said.

But perhaps only about five or six companies with a sufficient global infrastructure will be able take full advantage of the mainland market, he said.

Size and diversity make it unlike any other country, and many prefer to consider China a continent on a par with, say, Europe.

``The main obstacle will be distribution,'' Band said. ``If whiskey is going to become as significant in China as it is elsewhere, it is important to get people on the ground to make sure it's in the local liquor stores.'' AGENCE FRANCE-PRESSE

 


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