Diageo Launches Chinese White Spirit In UK
07/04/2012| 10:11am US/Eastern
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By Simon Zekaria
LONDON--Diageo PLC (>> Diageo plc) Wednesday said it has launched Chinese white spirit brand Shui Jing Fang into the U.K., as the liquor giant taps consumption of well-heeled Chinese consumers in the country before introducing the luxury product across Europe.
The U.K. is the first European market to sell Shui Jing Fang as the company strategically builds it into an "internationally recognised brand." Shui Jing Fang will then be launched in other northern European markets later this year, the company said in a statement.
Shui Jing Fang will be distributed throughout the U.K. by SeeWoo, a specialist U.K.-based Oriental food wholesaler, and will retail at just under GBP100 a bottle.
The 'baijiu' segment, a white spirit distilled from sorghum, wheat or rice, is China's most popular alcoholic drink, making up around 50% of China's alcohol revenue. Sales of lower-priced baijiu increased by 7% in 2011, while super-premium baijiu saw growth of 13%, according to Euromonitor data.
Europe's drinks giants, including France-based rival Pernod Ricard S.A. (>> PERNOD RICARD), are now fighting to break the market for China's national spirit, which is drunk in homes, restaurants and hotels across the country.
The drink is also continuing to gain popularity in overseas markets due to rising demand from Chinese travelers and Western businessmen keen to do business in China, Diageo added.
In June last year, Diageo became the largest single shareholder in premium baijiu producer Shui Jing Fang--listed in Shanghai as Sichuan Swellfun Co. Ltd. (>> Sichuan Swellfun Co., Ltd.)--after it raised its stake in Sichuan Chengdu Quanxing Group Company Ltd to 53%. It has also gained regulatory approval to buy the remaining shareholding, valuing the deal at just under $1 billion.
--Write to Simon Zekaria at simon.zekaria@dowjones.com
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