India-China standoff: Indian drinkers could swear off Baijiu

BENGALURU: Baijiu, the world’s largest-selling liquor from China, could become the latest casualty in India amid border tensions. VBev India, which brought the drink to India seven months ago, said it will review its partnership if consumers snub the beverage due to the standoff.

“If the cross-border friction affects the market sentiment and our customers are unwilling to consume the product, then the new sentiment will dominate our business call and we will reevaluate the partnership,” said Sumedh Singh Mandla, CEO VBev India, the Indian liquor distribution firm that partnered Chinese alcohol brand Jiangxiaobai to launch baijiu.

About 1.2 billion cases of baijiu, a heritage white spirit made with sorghum at an alcohol by volume (ABV) of 40%, are sold each year globally, making it the world’s top-selling spirit and almost twice the whisky segment. India, with liquor sales of nearly 400 million cases, is heavily skewed in favour of whisky, which accounts for about three-fourths of the market.

While India does not have a dominant indigenous liquor similar to baijiu or Russian vodka, the market is dominated by locally produced and adapted versions of European spirits called Indian-made foreign liquor, or IMFL. Jiangxiaobai baijiu is the only Chinese spirit and brand of alcohol available in India.

“Had the coronavirus outbreak and India-China tension not occurred, there was an opportunity for baijiu to arouse sincere level of interest in India as the awareness was evolving after the introduction in December,” said Sandeep Arora, director at luxury spirits consulting firm Spiritual Luxury Living, who has tasted baijiu overseas and in India. “The 12-month cycle would have created space for higher access to the specialised alcoholic spirit.”

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Indians were learning to like the unique taste of baijiu, which has an overriding flavor of tropical pineapple, he said.

India’s nationwide lockdown due to the coronavirus outbreak earlier this year put the second phase of baijiu’s launch on hold as hotels, restaurants and bars were shut. The rising India-China conflict has added to concerns.

“Baijiu is a niche alcoholic spirit and not as big a category as whisky, vodka and wine for us. It won’t impact my overall business,” said Mandla, adding the company is looking to exhaust existing stock. “We are in touch with Jiangxiaobai and they understand the retail situation of India amid the pandemic. It is a trial period for baijiu in India and both parties understand that if the product doesn’t work, supply has no meaning.”

Jiangxiaobai’s target consumer is the 18-35 segment, which made India a relevant market for the brand. “India has become a young country as the population of youngsters is growing faster than the older sections of people,” Zoe Fu, director of international business department at Chongqing-based Jiangxiaobai Liquor Co., told ET in December.



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