V&S Group enters China´s domestic spirits industry
As one of the first international companies, V&S Group enters China´s large domestic spirits industry. Together with one of the top three baijiu producers in China, JianNanChun (JNC), which is second largest in volume and third in revenue and tax, V&S Group has formed a joint venture which will develop a portfolio of premium baijiu brands. The new company is owned to 51% by V&S Group and 49% by JNC.
Baijiu is the traditional domestic spirit of China and is by far the most popular spirit in China. Over 520 million 9l cases of baijiu are sold every year in China. This is to compare to the total market of vodka, the world’s second largest spirits category, which accounts to 497 million 9l cases sold in the world. This makes baijiu the largest spirits category in the world and in recent years it has developed a fast growing premium segment.
“We have secured a solution which will combine the best of both parties. This joint venture will give us the opportunity to blend our commercial competence and strengths within marketing with JNC understanding of baijiu production and logistics knowledge,” says Mats Andersson, Senior VP Business Development at V&S Group.
“JNC is a leading premium baijiu producer and V&S is a leading international spirits company. We are therefore confident that the combination of JNC’s experience in the premium baijiu category and V&S’ experience in the premium vodka category will make the joint venture very successful,” says Mr Yang, JNC Group Director.
The new company will be based in Chengdu in Sichuan. Initially the joint venture will market and distribute existing baijiu brands within the premium segment.
“This joint venture gives us a foothold in the largest premium spirits category in the world, baijiu. China also has the largest growth potential of all our 14 focus markets, with an extraordinary economical development in recent years, including a rapidly growing middle-class. They are increasingly demanding premium quality alcohol. We are therefore thrilled to take on the responsibility of the joint venture together with JNC,” says Ketil Eriksen, President V&S Absolut Spirits.
V&S Absolut Spirits´ portfolio of international premium spirits brands, including ABSOLUT VODKA, will continue to be distributed through Maxxium in China. The global sales volume for ABSOLUT VODKA increased with a remarkable 7 percent last year.
V&S Group is the sixth largest international wine and spirits company in the world. The business area V&S Absolut Spirits is responsible for the international spirits brands portfolio including ABSOLUT VODKA. In 2006, the operating profit for the business area increased with 9 percent to 1.9 billion SEK.