toast to 56% jump in profit

SICHUAN Swellfun Co reported a 56-percent jump in net profit last year but warned slowing consumption and counterfeit products are having a negative impact on its business.

The Sichuan Province-based liquor maker's net income climbed to 313.7 million yuan (US$45.9 million) last year, the company said in a filing to the Shanghai Stock Exchange yesterday. Sales gained 17.43 percent to 1.18 billion yuan last year.

Sichuan Swellfun is a subsidiary of China's Sichuan Chengdu Quanxing Group Co, 49 percent owned by Diageo Highlands Holding BV. It sells distilled spirits under the Shuijingfang, Quanxing, Tianhaochen and Chengdu Daqu brands.

The firm said profit went up after it raised prices of Shuijingfang spirits twice and expanded the distribution network to expand its footprint in the high-end market segment. Partnering Diageo also helped boost Shuijingfang's international sales in terms of product quality and management.

Swellfun said the global financial crisis has taken its toll on liquor consumption in China but the mid-to-high-class spirit market offers huge potential as economic development is expected to continue to grow in the long term. But the company is cautious about future challenges, including intense market competition, counterfeit products and pricing pressure from smaller domestic rivals.

Net profit at Kweichow Moutai Co, the nation's largest liquor firm, jumped 34 percent to 3.7 billion yuan last year.