Tequila Captivates Solo Drinkers Amid COVID-19... Surge in Household Consumption

China's Famous Liquor Maotai's Stock Price Soars on Expectations of COVID-19 Restrictions Lift

[Asia Economy Reporter Kwon Jaehee] The liquor industry has emerged as a beneficiary of the novel coronavirus infection (COVID-19). Unlike other food and beverage companies that suffered due to restrictions on bar and restaurant operations, it is analyzed that household consumption actually increased due to 'social distancing.'

According to market research firm Nielsen on the 11th (local time), tequila sales surged 60% year-on-year in the fourth week of April. China's baijiu manufacturer Guizhou Maotai saw its sales in the first quarter increase by about 13% compared to the same period last year.

The reason liquor companies have gained a counterintuitive benefit despite COVID-19 is that they were classified as essential industries not subject to 'shutdown' measures. In fact, Mexico, the origin of tequila, closed all non-essential industries in March due to COVID-19, including breweries producing beer and other liquors. However, tequila was classified as an agricultural product and thus considered an essential business.

Moreover, 80% of tequila is exported, and the United States-Mexico-Canada Agreement (USMCA) imposes no restrictions on alcohol sales, leading to a significant increase in exports. According to trade data company Panjiva, tequila producers' exports in the first quarter of this year rose 42% compared to the same period last year.

The fact that the United States, the main importer of tequila, classified liquor stores as essential businesses in some states also contributed to boosting consumption. States such as New York, Maryland, and New Jersey designated liquor stores as essential businesses. Nielsen announced last month that consumption through liquor stores in the U.S. surged 75% year-on-year.

Maotai, regarded as a famous Chinese liquor, also posted surprising results despite the COVID-19 crisis. Maotai's sales in the first quarter rose 12.8% year-on-year to 22.405 billion yuan (approximately 3.869 trillion KRW). Net profit during the same period increased 16.7% to 13.094 billion yuan. Consequently, its stock price also rose. According to Bloomberg, as of May 11, Maotai's stock price reached a record high of 1,323 yuan (about 230,000 KRW). Its market capitalization alone reached 1.63 trillion yuan (about 281 trillion KRW), surpassing Coca-Cola.

Bloomberg reported that Maotai significantly contributed to leading the Shanghai stock market, which had been depressed due to COVID-19, into an upward trend.

This content was produced with the assistance of AI translation services.