Former head of Chinese liquor giant faces graft allegations

Yuan was expelled from the party on corruption allegations, the Communist Party's anti-graft agency said (AFP Photo/Fred DUFOUR)

The former head of Chinese liquor firm Kweichow Moutai, the world's most valuable spirits company, has become the latest Communist Party figure to fall in President Xi Jinping's sweeping anti-corruption campaign.

Yuan Renguo, 62, was dismissed from public office and expelled from the party on corruption allegations, the Communist Party's anti-graft agency said on Wednesday.

Yuan "seriously violated Party discipline and national laws and regulations" by using his position in return for political gain and money, according to the Central Commission for Discipline Inspection (CCDI).

An investigation found Yuan engaged in "family-style corruption", facilitated illegal sales of Moutai for unscrupulous dealers, and failed to report related personal affairs.

"The nature (of the matter) is vile and should be seriously dealt with," said the statement, without specifying the amount of money he allegedly acquired through illegal actions or bribes.

Yuan was no longer the president of Kweichow Moutai Group as of May 2018 after serving in the position for more than six years and being part of the company for more than two decades.

The CCDI in China's southern province of Guizhou will transfer Yuan's case to prosecutors.

Kweichow Moutai, which makes "baijiu", a fiery grain alcohol popular in China, has seen its share price soar this year on good earnings and bullish market sentiment.

Moutai leapt past London-based Diageo in 2017 to become the most valuable spirits company in the world.

But that followed several tough years for the industry.

An anti-corruption campaign launched in 2012 by Xi hit baijiu sales particularly hard as bottles of premium brands like Moutai had become a popular gift for schmoozing with or bribing Communist officials.

Baijiu, which is distilled from sorghum, rice or other grains, is the largest category of spirits consumed in the world, largely due to China's huge population and baijiu's ubiquity at weddings, banquets and business meetings in the country.

Moutai had gained the status in part because it was the tipple that then Premier Zhou Enlai and President Richard Nixon raised to toast the historic China-US rapprochement in 1972.

Sales at major producers cratered in the aftermath but have recovered in recent years in part because producers have sought to develop new products tailored to wider audiences.