HONG KONG (Reuters) - Chinese distiller Kweichow Moutai Co Ltd led a tumble in the country’s alcohol sector on Monday after Beijing banned its top brass from hosting boozy banquets while working, Communist Party chief Xi Jinping’s latest anti-corruption move.
Shares in Moutai, whose premium white spirits are much favored by the Chinese military, were down 5.8 percent in Shanghai at 9.07 p.m. ET, unwinding modest December gains.
The ban, announced in state media on Saturday, also bars senior military officials from staying in luxury hotels while on business, and comes after Xi made similar demands as he takes aim at the long, discursive meetings and extravagant welcoming ceremonies that mark official life in China.
Having gained almost one-third between January and the end of October, Moutai shares slumped 12.7 percent in November and are now up slightly more than 5 percent on the year.
Chinese alcohol stocks were first hit early last month when China’s incoming leaders heated the anti-corruption rhetoric at the 18th Communist Party Congress meeting at which Xi Jinping became the new party chief.
Moutai and other white spirits are also typically presented as gifts by those seeking favor from officials in China.
The sector was further knocked in late November by a contamination scare involving Jiugui Liquor Co Ltd.
In Shenzhen, Moutai’s sector peer Jiugui was down 2 percent, Wuliangye slid 3 percent, while Shanxi Fenjiu dived nearly 4 percent in Shanghai and was among the top drags on the CSI300 of the top Shanghai and Shenzhen listings, which was up 0.6 percent.
Reporting by Clement Tan; Editing by Daniel Magnowski