China's anti-corruption drive is really hitting Scotch Whisky

Xi Jinping makes problems for luxury goods.

A more unusual, but strong, market force is at work in China: an anti-corruption drive led by the new president, Xi Jinping. The giving of expensive luxury items to government officials has been a standard part of bureaucratic and business life in China, and has contributed in part to the dramatic growth in revenues and profits for multinational luxury goods companies operating in the country. Mr Xi however has swept in with a determination to stamp out showy bureaucracy and waste, and high end restaurants have suffered as official banquets have been cancelled and luxury local liquor makers have seen demand drop significantly.

All this will send a shiver through Scotch whisky makers, as well as other luxury goods companies in the UK and Europe. The most recent evidence comes from Pernod Ricard, owner of the Chivas Regal brand, which has seen sales of its Scotch whisky fall by a double digit rate over the critical Chinese New Year period.

Canadean’s local team are also reporting a slowdown in the sales value of red wine, as China’s wine drinkers switch to mid-range brands and the extraordinary growth in demand for top level labels such as Lafite, is finally checked.

Is this a short term blip or a sign of things to come? This partly depends on the strength of will of Mr Xi, and how long his commitment to the anti-corruption campaign lasts. For now, the luxury goods makers who have enjoyed this source of almost unfettered demand, will need to look to the rising income of the average Chinese consumer to drive growth – thus aligning with the government’s aim of middle class enrichment as the next phase of China’s economic growth.

All this will send a shiver through Scotch whisky makers Photograph: Getty Images.

Emily Neil is the CEO of Canadean

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Jeremy Corbyn challenged by Labour MPs to sack Ken Livingstone from defence review

Former mayor of London criticised at PLP meeting over comments on 7 July bombings. 

After Jeremy Corbyn's decision to give Labour MPs a free vote over air strikes in Syria, tonight's Parliamentary Labour Party (PLP) meeting was less fractious than it could have been. But one grandee was still moved to declare that the "ferocity" of the attacks on the leader made it the most "uplifting" he had attended.

Margaret Beckett, the former foreign secretary, told the meeting: "We cannot unite the party if the leader's office is determined to divide us." Several MPs said afterwards that many of those who shared Corbyn's opposition to air strikes believed he had mishandled the process by appealing to MPs over the heads of the shadow cabinet and then to members. David Winnick declared that those who favoured military action faced a "shakedown" and deselection by Momentum activists. "It is completely unacceptable. They are a party within a party," he said of the Corbyn-aligned group. The "huge applause" for Hilary Benn, who favours intervention, far outweighed that for the leader, I'm told. 

There was also loud agreement when Jack Dromey condemned Ken Livingstone for blaming Tony Blair's invasion of Iraq for the 7 July 2005 bombings. Along with Angela Smith MP, Dromey demanded that Livingstone be sacked as the co-chair of Labour's defence review. Significantly, Benn said aftewards that he agreed with every word Dromey had said. Corbyn's office has previously said that it is up to the NEC, not the leader, whether the former London mayor holds the position. In reference to 7 July, an aide repeated Corbyn's statement that he preferred to "remember the brilliant words Ken used after 7/7". 

As on previous occasions, MPs complained that the leader failed to answer the questions that were put to him. A shadow minister told me that he "dodged" one on whether he believed the UK should end air strikes against Isis in Iraq. In reference to Syria, a Corbyn aide said afterwards that "There was significant support for the leader. There was a wide debate, with people speaking on both sides of the arguments." After David Cameron's decision to call a vote on air strikes for Wednesday, leaving only a day for debate, the number of Labour MPs backing intervention is likely to fall. One shadow minister told me that as few as 40-50 may back the government, though most expect the total to be closer to the original figure of 99. 

At the end of another remarkable day in Labour's history, a Corbyn aide concluded: "It was always going to be a bumpy ride when you have a leader who was elected by a large number outside parliament but whose support in the PLP is quite limited. There are a small number who find it hard to come to terms with that result."

George Eaton is political editor of the New Statesman.