China's liquor and wine industry is struggling with low growth rates this year after years of rapid development.
This is especially true in Guizhou, China's major production province of white spirits, or baijiu.
In the province, a number of baijiu brands, including the renowned Kweichou Moutai, are taking various steps to help the liquor industry recover and achieve steady development.
As the market leader in China, Moutai decided to lower the threshold for franchised operations in unexploited areas to further extend its dealership network.
Experts said the campaign aims to cut the currently very high inventories.
Enterprises and individuals can apply for dealerships in smaller cities where the brand does not have a presence yet, Kweichou Moutai said in an online statement.
The baijiu giant laid out extremely strict rules for the applicants, who it said must have more than two years liquor-trade experience, a top-three sales performance record in local areas, strong social relationships and a mature sales team.
Guizhou's high-end liquor brands have also switched their primary customer base from government organizations to individuals and corporate groups by providing customized services.
"Our customized services include printing the buyer's initials or company names on the label," said a sales manager at Moutai's customized service department.
Local governments are also trying new ways to help enterprises recover.
Guizhou has roughly 600 liquor production companies and ensuring their survival and growth has been the top concern for local authorities.
To help smaller companies raise funds, the government helped establish a special institution - Guizhou Liquor Exchange - where liquor can be traded as futures.
"For baijiu, the quality and value rise after a certain period of storage, we simply pay for companies that want to bank their raw liquor for cash flow, and then put it on the trade board to see if there are buyers interested," said Peng Bo, chairman of Guizhou Liquor Exchange.
With enough funds smaller enterprises can continue to expand production scale and further develop in the market, he added.
Despite the fact that the liquor industry is not what it used to be, many investors still have high hopes for the market.
In 2013, China's largest beverage company, Hangzhou Wahaha Group, decided to invest more than 15 billion yuan to build an industrial park in Guizhou's Renhuai city, where 60 percent of the province's distilleries were located.
As well as working to attract investors, many liquor companies in Guizhou united to help each other.
"Guizhou is an ideal place for good-quality liquor, this is a legacy," said Zhang Chunxin, general manager of Guotai Group.
"When the whole industry is facing difficulties, we need joint efforts to promote the quality of our products, increase marketing efforts and strengthen the research," he said.
The province uses the annual International Alcoholic Beverage Expo, which opens today, to attract more overseas investors to help the industry bloom.
In 2013, the total revenue of Guizhou's liquor industry reached 49 billion yuan, which marked a 26 percent growth from 2012.
"The government of Guizhou is determined to promote sustainable development. The liquor industry brings little damage to the environment, so it is an ideal industry that fits the development pattern. We believe the industry will continue to grow steadily despite the slowdown this year," said Meng Qiliang deputy governor of Guizhou.
zhaokai@chinadaily.com.cn
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The quality and value of baijiu rises after a certain period of storage, according to industry insiders. |
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The Moutai brand was very popular among visitors during last year's expo. |
