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Baijiu industry continues tentative recovery

The Chinese baijiu industry enjoyed net profit margin gains last year as the sector continues to recover from 2013 losses, data published by the World Alcoholic Beverage Alliance shows.

The Baijiu category is continuing to recover, according to latest industry figures

The gross margin for baijiu makers’ core products increased to 33.1% in 2015, up from 32.1% the previous year, Development Report of Global Alcohol Industry 2016 reads.

Net profit margins increased from 13.68% in 2014 to 14.85% last year, reports China Daily.

While profitability is up, sales revenues slipped 3% from RMB 528 billion (about US$79bn) to RMB 512bn yuan (about US$76.5bn). This remains a long way from the US$92bn recorded in 2012 by the IWSR.

2012 marked a turning point for the baijiu industry when the Chinese government introduced anti-extravagance measures which restricted luxury spending and consumption.

The baijiu recovery is also evident in terms of the international brand recognition of the country’s producers. Moutai, often regarded as China’s “national liquor”, jumped 87 places to 243 in Brand Finance’s Global 500 report which ranks the world’s most valuable brands.

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