How China's national liquor greased the wheels of corruption among Communist elites

 

FILE – A customer walks past a glass case displaying Maotai liquors at a supermarket in Shenyang, Liaoning province, Aug. 8, 2012.

TAIPEI, TAIWAN —

Kweichow Moutai, the distiller of China’s most prestigious liquor, has seen three of its ex-chairmen face investigations for graft over the past five years, with a new probe into a former head of the maker of “firewater” announced earlier this month.

Over the past week, the topic has been trending on China’s social media and comes even as the company continues to see growth in sales, despite a weakening Chinese economy and lagging consumption.

Industry observers say that while the latest scandal is unlikely to hurt liquor sales, it highlights how corruption continues to ferment at Moutai – the drink of China’s state banquets since the 1970s.

Latest probe

Late last week on Jan. 2, authorities in China’s southwestern Guizhou province announced a probe into company official Ding Xiongjun on its website. Ding stepped down in April from the state-owned liquor giant, and, according to the announcement, is under investigation for “suspected serious disciplinary and legal violations.”

It is likely that Ding may follow in the footsteps of his two predecessors, Yuan Renguo and Gao Weidong, industry observers say. Yuan and Gao were jailed for life on charges of bribery in 2021 and 2024, respectively. Yuan died of a brain hemorrhage in late 2023.

FILE – People take photos outside the stand for Kweichow Moutai, a Chinese liquor brand, at the China Food and Drinks fair in Chengdu, in China's southwest Sichuan province, April 4, 2021.

While the charges against Ding remain unclear, the image of Moutai has long been tainted as businessmen in China mostly recognize it as a form of “hard currency” used for socializing with those in power.

One of the company’s most-cited quotes was from ex-U.S. diplomat Henry Kissinger to late Chinese leader Deng Xiaoping at a 1974 state dinner, “if we drink enough Moutai, we can solve anything.”

Wang Shoufeng, the former head of a construction labor force service company in Anyang, a city in central China’s Henan province, said that China’s corrupt officials only drink the pricey liquor even if that means taking extra measures to stay under the radar of anti-graft investigators.

“When our [property developers] friends invited officials for a drink, they often poured Moutai into plastic bottles, faking it as water. The liquor in the one yuan-worth bottles was valued at tens of thousands of yuan. That’s how they drank,” Wang told VOA Mandarin in a phone interview. Wang fled China late last year to Germany.

Moutai as bribes

Wang said that some Chinese officials in Henan were so greedy that many of his peers in the property industry had to “buy their personal safety or get things done” by offering bribes, including gifts of aged Moutai.

One such example was Wang Xiaoguang, a former vice governor of Guizhou province, who was found pouring some of his 4,000 bottles of aged Moutai down the drain when he was worried about a probe against him in late 2018, according to Chinese media reports.

Many of China’s Communist elites, including Chinese President Xi Jinping himself, are also known to enjoy Moutai.

Xi has also made corruption a key focus of his rule in China, purging more than five million, mostly party officials, between 2014 and 2024. Earlier this week in an address, Xi said corruption remains the biggest threat to the Chinese Communist Party.

FILE – A Luckin Coffee employee prepares baijiu liquor-flavored latte, the latest product in collaboration with Chinese liquor brand Kweichow Moutai, at a Luckin Coffee shop in Beijing on Sept. 4, 2023.

China’s weakened domestic consumption, however, is fueling concerns that the liquor giant’s future may not be bright.

One Shaanxi province-based vendor who sells a variety of spirits including Moutai on China’s short video platform Douyin told VOA Mandarin on Sunday that “now is not a good time” to buy or invest in bottles of Flying Fairy Moutai since its price may keep plunging to below 2,000 yuan.

A stock analyst in Beijing, who spoke with VOA Mandarin on the condition of anonymity, also expressed concern that Chinese consumers’ slashed spending on luxury goods may spell more bad news for the company’s share price as well, which too has been falling.

“Although Moutai\’s sales performance remains relatively stable, the company’s falling stock price reflects concern over its future sales,” the analyst told VOA. The analyst did not want to use his full name citing the sensitivity of the topic.

On Wednesday, Kweichow Moutai closed at 1442.5 yuan per share, a 45% drop from its record high of 2,627.88 yuan per share in early 2021.

 

By：VOA