Imported spirits expand local market for beverages

To demonstrate its confidence in China, the company built a malt whiskey distillery in Emeishan, Sichuan province, and it began operating in November. The company said it is the first distillery built by an international wine and spirits group in China and the first global distillery in the world to appoint a Chinese master distiller.

The company said it wants to fuse authentic whiskey-making craftsmanship and local knowledge to create an iconic malt whiskey made in China.

"It is a long-term investment, referring to not only the 1 billion yuan in investments in the coming decade, but also the fact that we are building new know-how and unique Chinese whiskey culture over the years. We expect to bring iconic Chinese malt whiskey from Emeishan to the world stage one day," Cottin-Bizonne said.

"Pernod Ricard China is a concrete and living example of the opening-up of the China market to foreign companies and investors," he said. "We started in China around 30 years ago with a modest operation. Today, we have passed the symbolic threshold of 1 billion euros of net sales. The past fiscal year was record-setting for us, while we believe we still have the potential to grow further.

"Looking ahead, Pernod Ricard will sustain our strong commitment in China, and further introduce our unique leading product portfolio with more consumer-centric, interactive engagements."

According to spirits analytics firm IWSR, China stands as the world's largest alcohol beverage market by both volume and value. However, the penetration rate of international spirits is still quite low at around 3 percent, which presents an opportunity for further growth for global retailers.

Diageo Plc, a British spirits distiller that offers products such as Scotch whisky, gin and beer, will invest $75 million to build its first malt whiskey distillery in China. The groundbreaking ceremony of the distillery, located in Eryuan county, Yunnan province, was held in November. The construction of the distillery is expected to begin this year.

Diageo said it considers Eryuan one of the best locations to produce whiskey in China, as the natural surroundings will allow it to craft a world-class and China-origin single malt whiskey meant to delight premium whiskey lovers in China.

At more than 2,100 meters above sea level, the site of the distillery was carefully selected for its temperate climate, rich natural biodiversity and access to natural spring water, the company said.

Diageo said the latest investment in Yunnan serves as an important part of its long-term commitment to invest and grow in China.

"There is a growing appreciation for whiskey among Chinese consumers. We have seen this in action through the emergence of whiskey bars and boutiques across China, a growing popularity of whiskey auctions and the successes of our own whiskey summit and similar events," said Sam Fischer, president for Asia-Pacific and global travel at Diageo.

"We will continue to focus on premium whiskey as part of our core business, and we will also add a world-class China-origin whiskey to this portfolio. We have observed that Chinese consumers are evolving to appreciate whiskey for its heritage and craft, rather than drinking it for status," Fischer said.

Last year, the London-based company invested in a new regional logistics hub in Shenzhen, Guangdong province. It is also building a new research and development center in Shanghai, which is set to open this year. The R&D center will help it create a dedicated innovation ecosystem in China.