Kweichow Moutai (600519.SH), China’s largest maker of baijiu liquor, blamed a drop in first-quarter profit on austerity measures imposed by new President Xi Jinping, Bloomberg reported. The company’s earnings rose by 21% in the first quarter, less than half of the pace of the same period a year earlier, reaching US$582 million (RMB3.59 billion). Demand for the company’s product, a sorghum-based spirit that can retail for US$300 a bottle, dropped after Xi warned in November that extravagant spending by party officials on luxuries such as baijiu builds resentment amongst China’s people and hurts the Party’s grip on power.
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