Bright future for white spirits

In addition to government's anti-graft calls, food safety scandals have also damaged development of the industry.

Last year, the Hunan Provincial Administration of Quality and Technological Supervision said liquor samples from Jiugui Liquor Co contained 1.04 milligrams of plasticizer per kilogram, higher than the 0.3 mg per kg standard set by the Ministry of Health.

Jiugui products were taken from shelves and shares in the Shenzhen-listed company were suspended when the scandal broke.

According to a statement released in March by the Hunan-based liquor maker, its first quarter profits plummeted 90 percent year-on-year and it expects its first quarter profits to be 8 million to 12 million yuan compared with 119 million yuan during the same quarter last year.

The China Alcoholic Drinks Association said earlier this month large-scale tests on China's liquor products show that almost all alcohol products contain plasticizers, with an average level of 0.537 mg/kg. They are used to thicken liquids.

"Although some alcohol brands are facing difficulties in the short term, the Chinese liquor industry is expected to have impressive growth potential in the future because the post-80 generation will gradually become major consumers," Frost & Sullivan forecast.

"The drinking habits of the post-80 population will determine the future of the Chinese white spirit market. The industry players who strengthen their marketing efforts toward the post-80 generation, such as their drinking habits and culture, will eventually win more market share," said Bian, of the China Cuisine Association.

According to the association, in 2015, the number of primary white spirit customers who are between the ages of 30 and 49 will be 441 million. The post-80 generation will make up 22 percent of them. In 2010, primary white spirit drinkers will number 444 million and the post-80 will make up 48.5 percent of them.

"The growth rate of high-end white spirits such as Moutai and Wuliangye might slide in the short term but, in the long run, the two brands, especially Wuliangye, will rebound quickly. The sales growth of middle or moderate high-level brands such as Yanghe and Langjiu will rapidly speed up. And the distiller that is successful in the middle to high-end white spirit market will be the ultimate winner," research and investing firm Rising Securities Co said in a report.