Rumors of a possible alcohol ban within Chinese Communist Party and government organizations have sent liquor giant Kweichow Moutai’s stocks briefly tumbling, wiping out millions of stock value, just when the liquor company has overtaken Tencent as the country’s most valuable firm.
There’s no official announcement yet, but the rumored ban first reported by Chinese financial news portal Blue Whale on Monday says that Beijing is about to introduce a ban on alcohol within the Party and government.
The rumor was enough to sink Kweichow Moutai’s stock price by over 5% to RMB 1,786 by the time of closing on Monday. Similarly other listed Chinese liquor companies including Wuliangye and Luzhou Laojiao all saw various price plunge on the news of the sweeping ban.
The Guizhou-based Baijiu company has already previously surpassed Diageo to become the world’s most valuable liquor brand and this month it surpassed Chinese tech giant Tencent to become the country’s biggest and most valuable firm.
The rumored ban apparently has been circulating among onshore investors and one executive from a listed Chinese liquor company confirmed to media that indeed there were talks. The new ban if introduced would cover all organizations within CCP and government systems, installing a sweeping and comprehensive ban among civil servants and officials.
China already has various alcohol bans implemented in different cities and provinces and the anti-corruption campaign launched in 2012 plunged China’s drinks market, as high-end Baijiu and wine are often used for gifting.