According to a report from Daxue Consulting, apart from baijiu－a potent clear liquor that still dominates the Chinese spirits market－Western spirits like whiskey and brandy enjoy increasing influence on Chinese consumers' alcohol choices.

With around 10 kilograms of Ugni Blanc grape being fermented into wine and then distilled twice to age in oak barrels for at least six years, a bottle of 700 ml Koya brandy is created, giving Chinese consumers more choices for high-end brandy.

To expand the Koya products in the domestic market, Yantai Changyu Pioneer Wine Co Ltd, China's leading wine producer, officially opened Chateau Koya, the country's first professional brandy chateau, in Yantai, Shandong province, on June 28.

"Koya brandy is positioned toward middle-and high-end customers," said Sun Jian, general manager of Changyu, adding Koya products enrich the company's brandy portfolio.

As early as in 1915, a brandy product of Changyu won a gold medal at the Panama-Pacific International Expo in San Francisco.

Last year, the company produced over 40,000 metric tons of brandy, generating 1 billion yuan ($145 million) worth of sales for Changyu, the company said.

"Along with our domestic wine and imported wine, brandy products will be a major driver of our company's sales in the near future," said Zhou Hongjiang, chairman of Changyu.

"There is a huge domestic market potential for brandy products.

The domestic demands for brandy will remain high," said Wang Yancai, director of the China Alcoholic Drinks Association.

"The demand for brandy in China has grown steadily over the past few years.

Data provided by CADA showed the amount of brandy consumed in 2018 reached 172,500 tons, from 152,200 tons in 2017 and 75,500 tons in 2010.

China's brandy production though is in its early days.

Dozens of domestic wine companies produce brandy and only a few of them are in scale.

Around 139,300 tons of brandy were produced in China last year, CADA said.

"China's current brandy market is mainly dominated by foreign products," said Wang Qi, executive vice-chairman of CADA.

Retail prices of Koya products on China's leading retail portal Taobao stand at a similar level with high-end foreign brandy products.

"Chinese brandy producers can embrace precious opportunities to develop the domestic market if they can carry on Chinese wine-making culture, (and) use world class winemaking skills to ensure the brandy quality," said Wang Qi.

"Chinese brandy producers like Changyu have been making achievements on innovating efficient ways to create quality products.

To promote the overall brandy industry in the domestic market, Chinese producers need to communicate and learn from their foreign counterparts," said Xu Yan, deputy head of Jiangnan University.

China's biggest wine producer, Changyu Wine Group, is moving to rapidly expand the domestic brandy market with the launch of the country's first brandy chateau in Yantai, East China's Shandong province.

As the pioneer of Chinese high-end brandy, Chateau Koya helps fill the current gap for professional brandy wineries in China and even in Asia.

Brandy, known as the "soul of wine", is a distilled liquor up to 40 degrees strong and is similar to Chinese white wine in terms of its alcoholic strength.

China has great potential in developing brandy market, industry experts said.

China's decision to initiate an anti-dumping investigation on imported brandy originating from the European Union is in accordance with the rules of the World Trade Organization and relevant Chinese laws and regulations, the Ministry of Commerce said on Thursday.

The move comes as a result of the application made by Chinese domestic industries which expressed concerns about unfair competition and the potential harm caused by imported brandy from the EU, said Shu Jueting, spokeswoman with the ministry, at a news conference.

Sales of brandy and rum on JDDJ during the Spring Festival holiday are 13.6 times and 8.8 times that of the same period of last year, respectively.

The ministry received an anti-dumping investigation application on November 30, 2023, officially submitted by the Beijing-based China Alcoholic Drinks Association (CADA) on behalf of the domestic brandy industry.

Sales of imported whisky and brandy brands are surging in China on rising demand from younger consumers and others with a zest for parties, market insiders said.

In terms of categories, brandy and whisky gained the most among hard liquors in the first half.

Imported brandy grew 16 percent in volume and more than 31 percent in value.

Jiangxiaobai, benchmarked against major international spirits including whiskey, vodka and brandy, clocks in at 40 percent alcohol by volume — significantly lower than traditional bottles' dizzying ABV of 52 percent.

Brandy and pasta saw sales jump 11 times and four times, respectively.

"Local customers lack full knowledge of the brand categories of whiskey, brandy, and vodka, but have partial recognition of specific brands (such as Louis XIII, Martell, and Jack Daniels)," said RIES China Senior Consultant Xiao Yao in offering advice to international spirits companies.

In 2019, the market for brandy was worth roughly 18.5 billion yuan, making it the top category of foreign spirits in China.

"Foreign liquor makers should prioritize category promotion rather than brand promotion so that they can 'implant' whiskey, brandy, and other similar brand categories in the minds of consumers," Xiao said.

"A retrospect on the history of whisky and brandy giants shows that their development are closely linked with a country's strength," said Xiao.

According to research by Euromonitor, there has been a double-digit growth in the volume of spirits sold in China during the past five years, with Chinese white spirit baijiu, brandy, and whisky dominating sales.

Earlier this month, China opened an anti-dumping investigation on brandy imported from the European Union, a step that appeared to be targeted at France, which backs the EV probe.