Baijiu industry faces challenges amid anti-corruption campaign

Baijiu, China's native alcohol, was surpassed by wine and foreign alcoholic drinks for the first time at the country's most important alcohol exhibition, indicating a fallout of the government's tightening on extravagant spending and a challenging industrial environment.

At the China Food and Drinks Fair, which opened on Friday in Chengdu and which has been an indicator of the alcohol business in the country since 2009, baijiu took two pavilions compared with four last year, while wine and imported alcohol dealers expanded to three from one.

Last year, baijiu sales were 502 billion yuan ($81 billion) with a growth rate of 11.22 percent, 15.6 percentage points lower than that in 2012, according to the China Alcoholic Drinks Association. At the same time, profits dropped by almost 2 percent compared with the previous year.