Diageo Plc. (DEO) has recently launched two limited versions of Shui Jing Fang gift packs that are brewed by homegrown baijiu in China.
The two editions mark the celebration of Chinese New Year 2012. Be in Asia or Europe, one can taste the flavor all around as the editions are shelved in 20 international airports across Asia Pacific, key airports in Manchester, London, Paris, Brussels, Milan and Schiphol.
Diageo, the distributor of Smirnoff and Johnny Walker, hopes that the new brand Shui Jing Fang, acquired recently, will be more popular than the existing tequila or scotch available in the market.
Diageo took over the local Sichuan white-spirit maker Shui Jing Fang in June 2011, after Chinese regulators approved the bid made by the liquor giant in 2010. The takeover made Diageo the largest single shareholder in the Chinese baijiu brand. The brewer paid $21.6 million to increase its stake in Shui Jing Fang from 43% to 59%.
Shui Jing Fang is an oldie in the business; it has existed since 1408. Chinese National Cultural Relics Bureau credited one of its distilleries in 2000 to be China’s first distillery. However, in the robust $41 billion baijiu market of China, the company has a mere 1% stake.
Diageo first invested in the Chinese brand in 2007, for a stake of 43%, after which it increased its holding to 49% in 2008.
Diageo distributes the Shui Jing Fang portfolio across South East Asia, Korea and Australia. It also took the super premium vodka Shanghai White to Hong Kong, Macau, where they are available at select duty-free outlets.
Shui Jing Fang is liked for its fiery taste and is a premium brand of the translucent Chinese white spirit.
Diageo, which faces stiff competition from Molson Coors Brewing Company (TAP) holds a Zacks #3 Rank, which translates into a short-term Hold rating.
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