Kweichou Moutai Distillery, the maker of China's "National Liquor," has announced plans to more than double sales within five years.
"Based on our capacity and surging consumers' demands, we plan to increase annual production to 20,000 tons by 2010, when turnover is projected to exceed 10 billion yuan (US$1.2 billion)," Qiao Hong, president of the Moutai Distillery Co in Guizhou Province, told China Daily.
Last year, the plant on the banks of the Chishui River in Renhuai of northern Guizhou Province, crossed the 10,000 ton threshold, generating sales of at least 4 billion yuan (US$481 million), according to Qiao.
Moutai, the leading liquor brand in China, is the country's equivalent of Scotch in England or vodka in Russia. Producing 10,000 tons was a benchmark goal proposed by late Chairman Mao Zedong in 1958. Late Premier Zhou Enlai used his favourite tipple to toast former US President Richard Nixon in 1972, Qiao said.
After long festering competition among the country's distillers, higher-grade flavoured spirits have become increasingly popular in the market, offering a chance for Moutai Distillery to flex its muscles, the executive said.
"Building on the market trends and our brand advantages, we've instigated a new 10,000-ton production plan this year to see that our yearly output will top 20,000 tons by 2010," he said.
The fact Moutai has been certified as a "green and organic food" caters to drinkers' tastes for healthier drinks, and people's improving living standards and expanded production will make the once expensive and rare goods affordable to additional consumers, Qiao said.
Last year, the Moutai Distillery claimed in its commercials that drinking Moutai liquor is good for health, toppling traditional beliefs that drinking hard liquor can damage the liver.
The claim sparked a fiery debate, which turned out to be a blessing in disguise for the distiller after most of the evidence provided by a host of drinkers and scientific research findings turned out in the company's favour, according to Chinese newspaper reports.
To meet its goal for 2010, the company will have to increase production capacity by 2,000 tons this year through better technology, and expand sales by 1,000 tons a year from 2005 onward, said Ji Keliang, Moutai Distillery Group's board chairman.
While the goal is financially and technically viable - given the company's reputation and unique brewing process, Ji said improving traffic conditions to help transport Moutai out of the mountainous region is still a looming problem.
Equal importance should be given to protecting the special environment in the Moutai Town and the water resources in the Chishui River, from which the distiller draws its water, he said.
Mysteriously, Moutai liquors, feature a "refreshing, rich and sweet with a distinct aftertaste" that has not been able to be reproduced elsewhere. A decade-long experiment in Zunyi in the 1970s failed to produce Moutai, though the same techniques by the same workers from the Moutai Distillery were employed, according to Qiao.
Qiao said he has two more priorities to solve: anti-counterfeiting and to expand into the overseas markets.
Nearly a fourth of Moutai liquors on sale in some small cities are fakes, according to Qiao.
To buy authentic products, Qiao advised consumers to take a hard look at the anti-fake labels or to purchase liquor at special shops. Currently, the Kweichow Distillery has set up 600 such shops nationwide. The company plans to open 2,000 outlets in a few years, he said.
Partly due to lack of market development, only 5 per cent of Moutai's annual production goes to foreign consumers in more than 60 countries and regions.
As a fresh step to tap that potential, the company has managed to sell Moutai through duty-free shops worldwide, according to Qiao.
Kweichou Moutai dates its liquor-making history to more than 2,000 years ago, and won a gold medal on the Panama Pacific International Expositions in 1915. In 1951, it became a State-run business by merging three private distilleries.
