Banquets Go Under the Table in China, Squeezing Food and Beverage
The anti-corruption blow to a tradition that's as Chinese as dumpling feasts on Lunar New Year or cash gifts at weddings would, taken at face value, slow the flow of high-end food, caterers and liquors.
To show that they're one with the common people, you might expect military officers or Party leaders instead to be seen at Country Style Cooking Restaurant Chain (CCSC) , a KFC-like fast food chain founded by a 24-year-old Chinese national.
Party heads also waxed grandiose last month about fostering growth in domestic businesses rather than foreign ones. Country Style Cooking ran 100 stores as of 2010, and wouldn't it suit China's nationalist global agenda to see the chain surpass Yum! Brands' (YUM) KFC?
You'd think shot glasses would be pushed aside in favor of juice made by the home-grown giant China Huiyuan Juice Group (1886.HK) while fruits for dessert would be supplied by firms with names such as China Green Agriculture (CGA) to promote labels that at least smack of healthy purity.
The no-banquet, no-booze edicts remind me of other clean-up-your-act orders. Around 2005, for example, officials were asking local governments to go easy on "political achievement projects," which mean fancy buildings or other public works that pay homage to whichever local regime commissioned them.
Chinese leaders have been under pressure to fight corruption as scandals hit ranking Party members, raising antigovernment cynicism among the public. It's all but assumed that those in power serve themselves more than the people, though most cynics forget about it unless reminded by some new incident.
But achievement projects are still fashionable, and banquets will remain that way. It can't be overstated that banquets are tethered to Chinese culture. They celebrate project completions, graduations, farewells and visits by important guests.
Then how to stop the Party's party police from gate crashing? Another well-heeded Chinese secret: Do it under the table. That means expect banned banquets to continue, just not as brazenly as before. The local Party secretary might not always be invited. Food and booze will still flow, though maybe squeezed here and there in case a member of the cynical masses takes a smartphone photo and posts it to a Weibo blog.
It's hard to pinpoint listed companies that will gain as the parties rage on quietly and market analysts aren't normally on the guest lists. In my experience as an occasional guest of these events before the would-be bans, nameless local companies would provide a lot of the food and beverage, such as tea leaves harvested in China and seafood from Chinese aquaculture farms. High-end Chinese cuisine relies more on natural, wet-market style ingredients than on foods processed by major labels. Banquets and receptions usually take places at state-run hotels or on the property held by whatever Party unit or government office is hosting an event.