SINGAPORE (Reuters) - A Chinese government crackdown on lavish spending by officials has pushed expensive liquor and high-end watches out of favor in the luxury gift-giving market, a survey from the Hurun Report, known for its annual China Rich List, showed on Tuesday.
Top alcohol maker Kweichow Moutai Co Ltd saw its clear ‘baijiu’ liquor — widely imbibed at official banquets and presented as a premium gift — fall to 13th place on the “best brand for gifting by men” table, down from fifth last year when there was a single, mixed-gender table, according to the report.
Swiss watchmaker Longines was the only watch brand to make the “gifting by men” list at number 15, replacing Rolex, which was ninth in 2012 but dropped off the list altogether this year. The report surveyed 551 Chinese with personal wealth of 10 million yuan ($1.6 million) or more.
The results follow a government crackdown, launched in March last year, on using public funds to buy luxury items such as baijiu, which can cost several thousand yuan per bottle. In December, alcohol was banned at military events.
“Watches and liquor have been influenced by government policies and have been pulled down by a change in leadership. It’s traditionally been that in government there are people who can influence policy in your favor,” Hurun founder Rupert Hoogewerf told Reuters.
State media have reported a wave of corruption and abuse-of-power cases since November’s senior leadership transition in the ruling Communist Party. In one case, an official was sacked after Internet photos showed him wearing a number of different luxury-brand watches.
The official Xinhua News Agency reported in late December that the luxury ban on officials had hit the share prices of listed liquor distillers.
Market leader Moutai had 12.5 billion yuan wiped off its market value after the new regulations were announced.
Moutai’s fall meant there was not a single Chinese brand in the top 10, and only one in the top 15 on the men’s gift list.
France dominated with six brands out of the top 10 in the men’s list and four in the women’s, including luxury accessory and apparel makers Louis Vuitton and Chanel.
However, less expensive gifts were the order of the day.
“With the current anti-corruption drive, officials can no longer receive blatantly expensive products, so we’re seeing a trend towards less-expensive giving,” said Hoogewerf.
Editing by John Ruwitch