Moutai rebuts contamination rumor New tests support liquor giant

In the latest food and beverage safety scare for Chinese consumers...

Leading Chinese liquor maker Kweichow Moutai cited favorable test results on Monday, from three quality tests - after trading of Moutai's stocks was suspended, over contamination rumors.

All reports suggest its products meet national safety standards.

But Moutai is still suspended - and new consumer concerns could have a lasting impact on China's liquor industry.

PKG

Good news for China's liquor giant: three quality tests found Moutai's products were safe... after trading of its stocks was suspended over contamination rumors.

Last week, a netizen using the name "Shui Jing Huang" claimed a sample of the company's liquor had been found to contain toxic levels of plasticizer.

The alleged Hong Kong investor posted images of the test report on Sunday night, forcing the emergency trading suspension of Moutai's shares, on the Shanghai Stock Exchange.

The Guizhou-based firm filed a statement to the exchange, saying the accusations, were false.

The three reports show samples of its products didn't contain excessive levels of plasticizer and conformed to national standards.

The results came from the state quality inspection authority and a provincial authority, both dated in August this year...

And a third report, dated in December, by a Shanghai-based company.

Trading of other Chinese alcohol producers also picked up on Monday... after suffering major losses during the scandal.

Jiugui Liquor Co., the first company embroiled in the allegations, saw its stocks rise nearly 6 percent by Monday's close.

Though its stocks are still suspended from trade, Moutai's positive test results are likely to help its case...

But the public's new, liquor safety fears, are unlikely to fade overnight.

Posing a new branding challenge to Chinese firms - whose costs, keep rising.

In the last three years, other Chinese food and beverage products have seen scandal: from tainted milk... to toxic pork.

Boosting dairy and meat imports... with more and more China's dairy products now coming from abroad.

With less trust, in Chinese dairy and meat brands.

And the fate of China's liquor industry could be the same.

Moutai has promised more cooperation with the public to improve its product safety... inviting on-site investigations.

But whether China's liquor industry can see a long term recovery, is yet to be known - in the country's crucial shift, to a consumer economy.