In the past five years, Pernod Ricard has noticed a great surge in the Chinese whiskey market. Handout.

Pernod Ricard, the French firm behind The Glenlivet, Ballantine’s and Chivas Regal, has started constructing a 1 billion yuan (US$139.8 million) malt whiskey distillery in southwestern China, the nation’s first set up by an international group, Yicai Global reported.

Pernod Ricard has broken ground on the 13-hectare site in Sichuan province and the Emeishan Malt Whiskey Distillery will become the world’s first to appoint a Chinese master distiller, the Paris-headquartered spirits company told Yicai Global at the sod-turning ceremony.

The project, which is expected to be completed in 2021, will have a visitor center and it aims to attract over two million tourists during the first decade of operation.

Pernod Ricard has been considering building a distillery in China as early as in 2016, public information shows. The firm chose the location of Emeishan because it has tourism potential and generous government support. The site is nearby Mount Emei, one of China’s four sacred Buddhist peaks, the report said.

Sichuan is a famous baijiu region and Mount Emei is a well-known tourist attraction in China, so the location of the distillery is a tactical decision aimed at cultivating the market, wine industry analyst Cai Xuefei told Yicai Global.

The capacity and the product range of the new distillery have not yet been finalized, Tracy Kwan, vice president marketing at Pernod Ricard Asia, said to Yicai Global. In the past five years, Pernod Ricard has noticed a great surge in the Chinese whiskey market, so the company decided to make whiskey in the country, he added.

Last year, sales of the company’s whiskey products achieved rapid growth in China, which prompted Pernod Ricard to invest and step up its game, said Jean-Etienne Gourgues, managing director of the firm’s China arm.

It is still too early to tell whether a bet on China’s liquor market is a good one, said Wang Dehui, general manager of Shenzhen’s Zhide Wine Marketing. The growth of the mainstream market will mostly consist of low-end and mid-range products in the near future so it might take a long time for the demand to diversify, he added.

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