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Thursday, 26 July, 2001, 11:26 GMT 12:26 UK
China's 'firewater' to float
Chinese President Jiang Zemin, right, and Li Peng, chairman of National Peoples Congress
President Zemin and a comrade toast 50 years of the People's Republic with Moutai
The liquor made famous for sustaining the Red Army on its Long March is about to take a step into the capitalist world by floating on the Chinese stock market.

Moutai is one of the largest state-owned enterprises in China and drunk famously at all official government banquets.

It has a reputation as the national drink - on a par with the likes of sake in Japan, vodka in Russia, whisky in Scotland or Tequila in Mexico.

Richard Nixon and Chairman Mao
Nixon toasted US-Chinese relations with Moutai
The fiery liquor with a distinct after-taste achieved international fame when it was served up to Richard Nixon during his visited to Beijing in 1972.

Now Kweichow Moutai plans to float on China's domestic stock market to raise 2bn yuan ($241m) with which it will expand its production by two-thirds.

The company needs to upgrade its technology and output to compete with foreign whiskeys and brandies that have cut its market share.

'2000' years old

Moutai liquors and rice wines were originally produced in three small workshops in southern China's Guizhou province before they were purchased by the government in 1951.

53%(v/v) Moutai Liquor
A standard bottle of 53% Moutai Liquor sells for about 180 yuan
The company, which says it has produced the wine for 2,000 years, began making the more potent liquor from wheat and sorghum in 1862.

The liquor takes about 5 years to produce and a bottle costs about 180 yuan (15), with 100-year old vintage bottles selling from more than 10,000 yuan (846).

Over proof

In the past 20 years, Moutai Distillery Group has developed into a diversified group with investments in hotels, restaurants and package material manufacturing across China.

The company has about 4,000 employees, annual pre-tax profit of approximately 200m yuan and it earns $10m from exports to over 100 countries.

Moutai, will be listed on the Shanghai stock exchange on 31 July and only Chinese investors will be able to buy shares.

See also:

24 Apr 01 | Business
China's exchange gets tough
01 Mar 01 | Business
China's stocks near record
19 Feb 01 | Business
China reforms stock market
14 Feb 01 | Business
Investing in China gains favour
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