Liquor producer admits use of ethanol

A well-known liquor maker has admitted using edible ethanol to produce liquor, saying it is a common practice in the sector, but industry experts warned of its potential negative impact on the liquor sector.

Bozhou-based Anhui Gujing Distillery Company admitted using ethanol for producing low-end liquor after its mid-year financial report released Wednesday revealed that it has spent some 46 million yuan ($7.2 million) to buy ethanol from one of its subsidiaries.

The money is enough to buy 6,596 tons of ethanol based on the current unit price of ethanol in the market, Beijing Times reported Sunday.

"The claim contradicts the company's earlier efforts in brand building and may trigger distrust among consumers toward the liquor sector," Yang Qingshan, a liquor expert with the China Brand Strategy Association, told the Global Times Sunday.

The company couldn't be reached by the Global Times Sunday but it admitted in a public statement Sunday night that it has "procured ethanol to make some low-end liquor," which has not been used in its high-end liquor production.

The company has adopted different techniques to produce high and low-end liquor and both the techniques are up to national standard, it said.

Shu Guohua, a senior liquor marketing expert, echoed the company's claim Sunday. Liquor makers generally use three brewery techniques to produce different levels of liquor while blending is used for low-end ones. All the three techniques are safe if national standards and requirements are strictly followed.

Some other famous brands, however, denied using ethanol in liquor production.

Kweichow Moutai has never ever bought ethanol to make liquor, Fan Ningping, the company secretary, was quoted by Beijing Times as saying.

"Using ethanol is neither rare nor illegal," Jiang Hui, executive vice president of Alcoholic Drinks Association in Henan province, told the Global Times.

Gujing has consistently expanded its market share in recent years, Yang said. Its liquor sales revenue grew 87 percent in 2011, according to the company's financial report.

Though some analysts said the news about ethanol won't seriously hurt the brand as its low-end liquor contributes a small part of the company's revenue, Yang said as "Gujing has been promoting itself as a producer of base liquor in the past five years, the use of ethanol contradicts its earlier branding effort."