Baijiu is a grain-based distilled liquor that ranges in price from less than 5 RMB to over 1 Million RMB at auction for a 1958 vintage. I like good Baijiu, as does Diageo, which controls the Sichuan-based Shuijingfang (水井坊) brand, known in English as Swellfun.
The premier Baijiu brand is Kweichow Moutai (贵州茅台). Unfortunately upwards of 85-90% of the Moutai on the market is fake, so most people who think they have tasted it probably never have enjoyed the real stuff. I am pretty sure I have had it a few times, but you never really know unless you get it yourself at the factory. And even then…
Kweichow Moutai, which trades in Shanghai under the ticker 600519 and has been an outstanding investment play on official corruption and rent-seeking, recently paid the largest dividend in the history of China’s stock markets. The company would make even more money if, as Caixin reported in May, government agencies did not buy huge quantities of it at a discount. Moutai’s core business could see some pressure though, as recently Premier Wen Jiabao vowed to stop government officials from squandering money on expensive, “luxury”, liquor. But with Moutai shares back trading near a 52-week high it appears investors believe Wen’s Baijiu crackdown threat is as credible as the calls for political reform.
Enter Xi Jiu (习酒), a Baijiu brand owned by Kweichow Moutai. The Xi Jiu distillery is located in Xishui County, Guizhou Province, about 50 kilometers from the Moutai distillery. Xi Jiu was established in 1952 and merged into Kweichow Moutai in 1998.
Xi Jiu historically has been a mid-tier Baijiu brand, but 2012 may turn out to be Xi Jiu’s year. Xi Jiu has two things going for it, in addition to having a name that is a homonym for 喜酒, or “wedding banquet liquor”. One, it may be more acceptable for bureaucrats to imbibe, if Wen’s crackdown is real. Two, and more important, the character for the “Xi” in “Xi Jiu” is the same character 习 as the surname of Xi Jinping 习近平, China’s presumed next leader.
I first heard about Xijiu last December, when a friend told a few of us that he knew the main Beijing distributor for Xi Jiu and that the company was planning a 400 Million RMB marketing blitz, including ads at the start of the CCTV Evening News, to capitalize on the ascension of Xi Jinping. Part of the marketing pitch was that Chinese gift-givers and their official recipients would be clamoring for Xi Jiu by the 18th Party Congress in late 2012.
So I bought a case of 1988 Xi Jiu for a few thousand RMB and have all but one bottle, which already went out as a gift, sitting in my study, just waiting for the hoarding to start and the Xi Jiu bubble to blow, as this article 十八大后喝习酒 习酒被囤积炒高 suggests. Worst case? I have five bottles of decent Baijiu I can share with friends and/or readers of Sinocism who are in Beijing.
Many Sinocism readers may not enjoy drinking Baijiu, some (the deprived ones I would argue) may even call it “evil”, poison”, “gasoline, “rot gut” or worse. But is it bad for you? 300 Shots at Greatness, a blog dedicated to the pursuit of Baijiu enlightenment, asked in a recent post if Will baijiu kill you? The answer, no doubt surprising to some, is no, and in fact it might actually be good for you, in moderation.
Baijiu gets a bum rap, and Xi Jiu may be the next great China investment…