From the China Compliance Digest (Issue No. 9: April 9, 2012):
At a State Council meeting last week, Chinese premier Wen Jiabao pledged to ban the use of public funds to buy luxury goods like high-end cigarettes and Moutai, known as “China’s national liquor.” Wen included the pledge in a general call for state-owned enterprises and agencies to rein in unnecessary expenses.
Though Wen did not mention Moutai by name, company shares fell by nearly seven percent the day after his comments. Moutai, which costs about $300 a bottle, has garnered increasing attention of late for its high-priced presence at official government receptions and dinners. The liquor’s use as a bribe has been widely reported.
Shares of Wuliangye, another luxury liquor company, dropped by 6.5 percent in the wake of Wen’s pledge.
Meanwhile, China Youth Daily estimated that local officials spend 70% of their workday dining out with guests and attending public-funded receptions.
Sources: Business Week, The Beijing News (新京报), Beijing Morning Post (北京晨报), China Youth Daily (中国青年报)
For a limited time, subscribers to the FCPA Blog will receive a complimentary one-month subscription to the China Compliance Digest. Subscribe to the FCPA Blog by filling in the box on the left under 'Connect.'