Kweichow Moutai

Kweichow Moutai is a high-end Chinese producer of baijiu, the world’s biggest-selling spirit. Our Investment Manager has invested in Kweichow Moutai for a number of years. The company’s products are hugely popular in China’s massive baijiu market. Male consumers, who account for most baijiu consumption, tend to drink premium baijiu such as Kweichow Moutai as they grow older and wealthier. Swelling numbers of high-net-worth individuals in China should therefore be a powerful long-term driver of demand. We have actively engaged with the company on a range of topics including climate change, environmental practices, labour management, human rights and stakeholder interests and corporate governance. We reviewed the company’s 2019 corporate and social responsibility (CSR) report and believe that its ESG practices, and disclosures, have been improving. Meanwhile, Kweichow Moutai sought specific feedback from investors on a range of ESG-related topics. In January 2022, we contacted the Board to encourage the company to establish energy efficiency targets and distribute its CSR report to a wider audience. MSCI recently upgraded the company’s ESG rating from CCC to B. Our Investment Manager believes that its engagement with the company has contributed to, and will continue to contribute to, a higher ESG rating and positive outcomes for stakeholders.

Companies selected for illustrative purposes only to demonstrate the investment management style described herein and not as an investment recommendation or indication of future performance.