Caixin
Aug 28, 2012 07:11 PM

Company Admits Using Ethanol to Make Liquor

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(Beijing) – One of China's largest state-owned producers of baijiu, Anhui Gujing Group Co. Ltd., said on August 27 that it used edible ethanol to make low-end products.

The announcement said this was in line with national standards to make baijiu, a popular distilled Chinese liquor.

The announcement named the Gujinggong line of baijiu as having ethanol as an ingredient. Ethanol is an alcohol commonly made through the fermentation of sugar, and is sometimes called drinking alcohol.

"It is impossible for a low-end liquor to be brewed by grains completely," an industry insider said. "Companies are not willing to say in public that they use ethanol."

Gujing's high-end products are all made by fermenting grain and were free of ethanol, the announcement said.

Baijiu makers usually profit from their high-end products, and use their low-end products to occupy market share. Using ethanol can reduce production costs.

The operating revenue of Gujing's low-end products in the first six months of the year was 50 million yuan, up 205 percent compared to the same period last year, a company report said. Its high-end liquor had operating revenue of 1.25 billion yuan, up 32 percent.

Gujing's financial report said it bought 6,596 tons of ethanol for 45.51 million yuan from Anhui Ruifuxiang Food Co. Ltd. in the first half. Ruifuxiang is a food processing company in Anhui Province.

In 2009, Gujing bought products worth of 15.42 million yuan from Ruifuxiang, its financial report said. From 2009 to 2011, it bought a product from Ruifuxiang, but did not disclose what it was.

Ruifuxiang's main products are ethanol, wheat protein powder and flour. Gujing took it over in 2001.

 

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