(Yicai) June 19 -- Big international distillers have been raising their investment in the Chinese market recently, including accelerating the launch of localized products.

At the recent Shanghai International Film Festival, Pernod Ricard’s Martell brand was an official partner. The French company also showcased two locally made products, namely Chuan Malt Whisky from Sichuan and Helan Mountain Xiao Feng Chardonnay from Ningxia.

Chuan Malt is made at Pernod Ricard’s first malt whisky distillery in China, which it opened in Emeishan, Sichuan province with a total investment of about CNY1 billion (USD138 million).

China is a dynamic market with huge opportunities for Diageo, Atul Chhaparwal, the UK firm’s new China managing director, told Yicai. The company best known for Johnny Walker and Baileys has been hiking investment in the Chinese market in recent years. In March it opened China's first single malt whisky distillery in Eryuan, Yunnan province, and it also opened a research and development center in Shanghai to help develop localized products for the Chinese market.

With the emergence of younger consumer groups, China’s liquor market has become more diversified, opening up new opportunities for imported spirits such as whisky.

According to a report released in March by the Whisky Committee of the China Alcoholic Drinks Association, the Chinese market was worth CNY5.5 billion (USD758 million) last year, having grown about 4.2 times in just over 10 years. But in the first four months of this year, China’s whisky imports tumbled 30 percent by volume from a year earlier, with their value sank almost 23 percent.

Jerome Cottin-Bizonne, Pernod Ricard’s chief executive officer, said this was because of the past rapid production of whisky in China, which meant the stocks from the last year or two were so high that it has taken some time to digest. But the demand for whisky among Chinese consumers is still surging.

International spirits account for less than 5 percent of China’s alcoholic beverages market, so global producers are expected to continue building factories in China and exploring new areas of the market.

Editor: Tom Litting