Cognac lovers like Jay Z and Ludacris must be relieved they aren’t shilling their luxury bottles in China. A campaign against prostitution in nightclubs and bars in China has allegedly hurt cognac sales nationwide.
According to CNBC, Beijing’s attempt to clean up the nation’s economy has gone beyond just stopping extravagant gift-giving amongst corrupt Chinese officials. The government has started a strict crackdown on the “yellow” sector, in which bars and karaoke joints offer a place for prostitution and other forms of illicit activity. Approximately 2,400 venues were shut down just six days after the operation began on February 10 of this year.
Trever Stirling, beverage analyst at Sanford Berstein, tells CNBC,
“There are high-end outlets and they tend to offer high-end liquor and people going are in the mood to treat themselves. People are going to be cautious about going to these bars because they don’t want to be caught in a police raid.”
Although the illicit venues may find a way to reopen, “people are going to be cautious about going to these bars because they don’t want to be caught in a police raid,” says Stirling.
CNBC reports, “While anti-extravagance measures are likely to weigh on cognac makers this year, they are likely to recover in 2015.”
[via The Shanghaiist]