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Home Finance The Most Severe Ecological Test of "China's First Wine Town"

The Most Severe Ecological Test of “China’s First Wine Town”

Maotai Town, Renhuai City, Zunyi, Guizhou Province is located on the banks of the Chishui River and is known as “China’s No. 1 Wine Town”. Because many wine companies have problems such as destroying the ecology and building without approval, the local government has recently been named by the central government.

Ecological Test of "China's First Wine Town"
The Shiba River, a tributary of the Chishui River in Renhuai City, was notified for its water quality exceeding the standard

“Illegal construction and ecological destruction of liquor companies in the Chishui River Basin occur from time to time, posing a threat to the ecological environment of the basin.” On March 18 this year, the Central Second Ecological Environmental Protection Inspectorate Group pointed out to Guizhou Province that the water quality of the mainstream Chishui River is generally stable at the surface water class II standard, but some river basins and regional ecological environment problems are still relatively prominent. Among the 11 tributaries of the Chishui River flowing through Maotai Town, Zunyi City, 4 of them are of inferior V class.

Behind the ecological problems is industrial chaos. The inspection team pointed out: “Renhuai City’s implementation of the relevant industrial development regional layout planning is not strict, and the illegal use of land is restricted and standardized development areas, and construction without approval are prominent. Since 2020, Jinjiang Wine Company has illegally occupied forest land twice. It was investigated and dealt with, and some mountains and woodlands were destroyed.”

The tributaries were black and smelly

The Chishui River originates from Zhenxiong, Yunnan, with a total length of more than 500 kilometers. It is an important tributary of the upper reaches of the Yangtze River. Many brands such as Maotai, Langjiu, and Luzhou Laojiao have been bred on both sides of the river, so it is known as China’s “Beautiful Wine River”. Renhuai City is a regional central city in the Chishui River Basin and a core production area of ​​the world’s high-quality Maotai-flavor liquor.

Chishui River has made liquor enterprises, and liquor enterprises have driven the local economy. The materials provided by Renhuai City show that Renhuai is the origin and main producing area of ​​Chinese Maotai-flavor liquor, and the liquor industry is Renhuai’s leading industry and an important economic engine. In 2021, the city will achieve a regional GDP of 156.449 billion yuan, its economic aggregate will rank 12th among the top 100 counties and cities in the country, and its comprehensive strength ranks 4th among the top 100 western counties. In 2021, there are 106 liquor enterprises above the designated size in the city, and the total output value of the liquor industry will increase by 29.9% year on year; the packaging volume of liquor will be 197,800 kiloliters, a year-on-year increase of 31.5%.

While the Renhuai liquor industry is developing rapidly, the pollution problem of the Chishui River is frequently reported in the newspapers. On July 26, 2021, the official website of the Department of Ecology and Environment of Guizhou Province released an article “The pollution of the Renhuai section of the Chishui River in Zunyi City still remains, and the regional environmental problems are prominent”. The article stated that in April 2021, the seventh ecological and environmental protection inspection team of Guizhou Province inspected Zunyi City and found that the liquor industry in Renhuai City developed disorderly, and the pollution control was not well promoted.

“The 2019 National Yangtze River Economic Belt warning film revealed that the liquor enterprises in Renhuai City were discharging excessively, the centralized sewage treatment facilities were not operating normally, and the tributaries of the Chishui River were seriously polluted. The waste water pollution control of the liquor industry will be completed before the end of the year, and the water quality targets of Class III will be achieved in each stream.” The seventh ecological environmental protection inspection team of Guizhou Province criticized and pointed out that the inspection team found that the Renhuai Municipal Government and relevant functional departments did not plan well. Liquor enterprises developed disorderly, pollution control progressed slowly, and the pollution of various streams and ditches remained, and regional environmental problems were prominent.

The provincial inspection team pointed out in April last year that there are 1,690 liquor companies in Renhuai City, of which 778 are in production in 2021. In 2021, among the liquor enterprises in production in Renhuai City, the cooling water is mainly water-cooled. According to the requirements of relevant standards and regulations, cooling water must be collected and treated and reused, and the reuse rate is not less than 80%.

“However, except for a few companies such as Moutai Liquor Co., Ltd., which built cooling water circulation treatment systems as required, most of the remaining liquor companies built simple cooling pools on roofs and factory areas, which failed to meet relevant standards and specifications. The cooling water with high temperature and high concentration is directly discharged into the external environment, increasing the pollution load of each stream.” The official website of the Guizhou Provincial Department of Ecology and Environment criticized several companies. The cooling water of Renhuai Wenyang Wine Industry Co., Ltd. was discharged directly, and the water quality was black; the cooling water pipe network of the Jincheng Wine Industry was disorganized, and external drainage pipes were set up; the cooling water collection pool of Jinmao Ancient Winery had wastewater overflow.

Qiu Shuyi, dean of the College of Brewing and Food Engineering of Guizhou University and director of the Guizhou Provincial Key Laboratory of Fermentation Engineering and Biopharmaceuticals, said that in the past, the sewage treatment capacity of Renhuai City was limited, and some wineries were not standardized, and some were in order to save money. There is the phenomenon of sewage discharge to the Chishui River, especially in the rainy season, this phenomenon is more prominent. In addition, some enterprises did not have anti-leakage and anti-seepage devices in their cellars, which resulted in the extravasation of cellar bottom water.

Ecological Test of "China's First Wine Town"
The brewing workshop of a winery in Maotai Town

Official monitoring data shows that the water quality of Shiba River, Renxi Valley, Lanjiawan, Yuanmuyan and Shengli Valley, the tributaries of Chishui River in Renhuai City, all exceeded the standard. From January to March 2021, the COD (chemical oxygen demand) of Lanjia Bay is as high as 251mg/L; the COD of Renxigou water quality is as high as 165mg/L, both of which are inferior to Class V water quality. The inspection team believes that some liquor companies have weak awareness of environmental protection, frequent violations of laws and regulations, and the situation of water pollution prevention and control in some creeks in the Renhuai section of the Chishui River is severe.

Many wine companies “get on the bus first and then make up the ticket”

In the relevant circulars of the environmental protection inspection teams of the central government and Guizhou Province, it is mentioned that many local wine companies have problems with the building before approval.

Inspectors from the seventh ecological and environmental protection inspection team of Guizhou Province found that there are still 20 production enterprises in the prohibited development zone planned by Renhuai City that has not yet been relocated. After random inspections, some liquor companies have illegally occupied land, and environmental impact assessments have been “built before approval”. Bayi Liquor, Xixiangfeng Liquor, Jinjiao Liquor, etc. were put into the construction without going through the approval procedures for land use; Maotai Town Collection Liquor, Maoding Liquor Co., Ltd., and Jinmao Ancient Liquor Phase II project did not go through the environmental impact assessment procedures. The second central ecological and environmental protection inspection team pointed out that since 2020, Jinjiang Wine Industry has been investigated for illegal occupation of forest land twice, and some mountains and forest land have been destroyed.

According to the official website of Jinjiang Liquor Industry, the company is only separated by a river from Kweichow Moutai Distillery. In 1996, “Jinjiang Wine Industry Co., Ltd., Maotai Town, Renhuai City, Guizhou Province” was established. In 2013, it reached a strategic cooperation with Hangzhou Wahaha Group and established Lingjianguo Wine Co., Ltd., Maotai Town, Renhuai City, Guizhou Province. The company currently has an annual production capacity of more than 5,000 tons of high-quality Maotai-flavored wine, covers an area of ​​more than 300 acres, and has more than 350 employees. According to the data, Wang Hongbin, chairman of Jinjiang Wine Industry, has won honors such as “Guizhou Wine Craftsman” issued by the Guizhou Provincial Federation of Trade Unions.

“China News Weekly” investigated and learned that the above-mentioned unapproved pre-construction project refers to the “Maotai Town Maotai Wine Valley” project developed and invested by Jinjiang Wine Industry, which started construction on the morning of November 3, 2020. According to the relevant information from Jinjiang Wine Industry, the Maoxiang Wine Valley project has a total investment of 600 million yuan, covers an area of ​​130,000 square meters, and has a total construction area of ​​160,080 square meters. The construction content of the project includes sauce wine culture base, sauce wine exhibition and sales center, sauce wine culture exchange center, sauce wine valley cultural museum, sauce wine valley ancient method brewing area, packaging workshop, comprehensive building, office building, expo hall, etc. The construction period is 2 years, 1 year for decoration, to ensure that it will be put into operation within 3 years.

Ecological Test of "China's First Wine Town"
There is a shop in Renhuai City that sells the self-proclaimed “Maotai Sanjiu” in Maotai Town, and the cheapest price is only 18 yuan per catty

On April 3, when the reporter visited the Maotai Wine Valley project, they found that the project is located on a mountain opposite the Maotai International Hotel and is now in a state of shutdown. An executive of a nearby company revealed that Jinjiangjiu Valley was suspended last year due to ecological damage. “When some nearby wine companies expanded, everything went smoothly. But when Jinjiang Wine Industry did this project, it made too much noise.”

The contractor of Maoxiang Liquor Valley is Sichuan Honglin Construction Group Co., Ltd. A staff member of the company said that the shutdown of the project was the reason for the owner (Golden Jam Company). “It seems to be related to ecological destruction and construction without approval.” A person in charge of the administrative department of Jinjiang Company confirmed to “China News Weekly” that the Jiangxiang Wine Valley project was indeed suspended last year, and there is no construction permit yet. “After all, this is a construction project without approval and needs to be rectified, so Sichuan Honglin Company dare not continue construction.”

The person in charge said that the Jinjiang Wine Industry’s destruction of forestland mentioned by the Central Second Ecological Environmental Protection Inspectorate also occurred during the construction of Maoxiang Wine Valley. “Actually, the small saplings on the hillside were destroyed at that time, and the forest has not yet become a forest.” The person in charge said that Jinjiang Wine Industry won the land a few years ago, and the current forest land license has been approved. The company has also reported the relevant materials for the application for the construction permit to the Housing and Urban-rural Development Bureau, and is under review. “Other procedures are complete and are being reported in accordance with standard procedures. As for when to start construction, we are also waiting for the results.”

Guizhou Bayi Wine Industry (Group) Co., Ltd. (referred to as “Bayi Wine Industry”) and other companies also have the problem of building before approval. A staff member of Bayi Wine Industry told said that when the company was expanding, some procedures were not completed before starting construction, and now it has been suspended due to lack of construction permits. “We are speeding up the relevant procedures, and some procedures may not be completed in two years.”

A number of local entrepreneurs interviewed said that many wine companies in Renhuai City have problems of building before approval, and there are certain “pragmatic considerations”. The local government has always attached great importance to the development of wine enterprises, but the many characteristics of the mountains have restricted the development of wine enterprises. In order to solve this dilemma, the local government buys the quota of non-local cultivated land in a balanced way to achieve new construction land and meet the needs of enterprise development, but this requires a process. In order to develop, some enterprises can also “make up for the formalities while building”.

Qiu Shuyi also said that in the past, some wine companies “emphasized development and neglected management”. Coupled with the shortage of land construction indicators in Guizhou Province, it took a long process for some companies to obtain a piece of land. In this context, in order to start work as soon as possible, some wine companies have the situation of “getting on the bus first and then making up the ticket”.

From the “Adjustment and Improvement Plan of Renhuai City Land Utilization Master Plan (2006-2020)” formulated by Renhuai Municipal Government in July 2017, it can be seen that the whole city of Renhuai is dominated by mountains, accounting for about 86.7% of the total land area. , the dam only accounts for 1.9% of the total land area.

It has become Renhuai’s top priority to supplement the shortage of construction land indicators by purchasing arable land indicators and balancing the occupation and compensation. The above-mentioned “Plan” mentioned that in order to complete the task of balancing the occupation and compensation of cultivated land, from 2010 to 2014, the city purchased 809.42 hectares of cultivated land from Hezhang County, Tongzi County, Fenggang County, Zheng’an County, Wuchuan County and Daozhen County, and the amount of cultivated land accounted for and compensated was 809.42 hectares. To balance the source of the main indicators, it is necessary to rely on off-site purchases, and it is more difficult to supplement locally.

During the implementation of the above-mentioned plan, the whole city of Renhuai supplemented 674.67 hectares of arable land through land development, reclamation and reclamation, which only fulfilled 34.6% of the planned target in 2020, and was less than half (46.65%) of the total area of ​​arable land occupied by new construction in the city during the same period . The speed of construction occupying arable land far exceeds the speed of replenishing arable land.

The main reason for the rapid occupation of arable land for construction is that Renhuai City’s “national wine industry has developed rapidly, and the scale of construction land has grown rapidly”. The above plan determines that by 2020, the total scale of new construction land, agricultural land occupied by new construction, and cultivated land occupied by new construction will be controlled within 3,329.00 hectares, 2,385.00 hectares, and 1,811.00 hectares, respectively. In 2014, the city’s total scale of new construction land was 3049.21 hectares, the total scale of agricultural land occupied by new construction was 2567.08 hectares, and the total scale of cultivated land occupied by new construction was 1446.15 hectares. “The implementation of the current plan is just over halfway through, and the construction land index and use progress have reached about 90%, and some have exceeded 100%.”

The shortage of land indicators has also led to skyrocketing prices. In July 2021, Lv Yuhua, executive vice president, and secretary-general of Zunyi City (Renhuai City) Liquor Industry Association, once said: “Now Renhuai’s land is gold. An enterprise needs one mu of land, including resource compensation fees, no matter whether it is Diaoyutai or Maotai, it used to be 40,000 to 51,000 acres, and now it is more than 500,001 acres, and some are even close to 700,000.”

Ecological Test of "China's First Wine Town"
In April 2019, in the Maotai Town section of the Chishui River, the houses along the river were full of billboards of large and small wineries.

Rectification problems

In order to consolidate land, facilitate supervision, and control pollution, the Renhuai Municipal Government is taking measures such as merger and reorganization of “small, scattered and weak” wine companies. The Renhuai Municipal Party Committee Propaganda Department sent a written reply to “China News Weekly” stating that the Renhuai Municipal Party Committee and Municipal Government made it clear that in the next three years from 2021, more than 600 “small and weak” liquor enterprises will be comprehensively managed.

The rectification goal is to achieve a significant decrease in the total number of Renhuai liquor production enterprises and a substantial increase in enterprises above the designated size by 2025. “Shut down and transfer, all foreign non-physical capital investment projects will be suspended, and no expansion of production capacity without approval will be allowed.

Renhuai City regards it as a “slimming revolution” in the liquor industry. On September 7, 2021, the Renhuai Municipal Government Office issued the “Notice of Guiding Opinions on the Implementation of Mergers and Reorganizations of Liquor Enterprises in Renhuai City”, which clearly aims to make the reorganized liquor enterprises complete with complete certificates and licenses by promoting the merger and reorganization of liquor enterprises. The procedures are legal, safe and reliable, eco-friendly, high-quality, and efficient, and the independent annual output of Daqu Maotai is more than 400 tons, and the new liquor enterprise project construction capacity is more than 2,000 tons of Daqu Maoxiang liquor per year. The document also clarifies the staged industrial cluster development goals of the Renhuai sauce wine industry. By 2025, the city’s liquor output will reach 450,000 kiloliters, the total output value of the liquor industry will reach more than 150 billion yuan, and the tax revenue will exceed 60 billion yuan. A liquor industry cluster with one hundred-billion-level enterprise, three ten-billion-level enterprises, more than 10 billion-level enterprises, and 40 100-billion-level enterprises has been initially formed, and the upstream and downstream industrial chain of liquor has been further improved.

In the process of merging and reorganizing liquor enterprises in Renhuai City, how to withdraw in an orderly manner of “small, scattered and weak” still faces many obstacles, and there is a dilemma in the Renxigou area of ​​Maotai Town.

Renxigou is located in the tributary of Chishui River and belongs to Yantan Village. Yantan Village is located in the core area of ​​China’s wine capital wine industry and the development of the tertiary industry. A number of interviewed local wine company owners said that around 2000, some wine companies have sprung up near Renxi Valley, and there are currently 18 wine companies (including workshops).

Jindong Group is planning to build a Maotai-flavor liquor brewing base in Renxigou. When China News Weekly visited Yantian Village, it found that a huge billboard was posted in the village with the words “Aerial View of Jindong Sauce Wine Brewing Base Planning”. According to the official website of Jindong Investment Group Co., Ltd. (“Jindong Group”), the company was founded in 1996 and has formed a business model of “industry + investment”. Jindong Group has 15,000 employees and total assets of more than 30 billion yuan.

Ou Jie, chairman of Maotai Town Hanwang Wine Co., Ltd., told China News Weekly that Hanwang Wine currently has 356 cellars and more than 200 workers, which is the largest of the 18 wine companies (including workshops) in Renxigou. “For Hanwang Liquor, we will obey the government’s arrangement whether it will be merged or upgraded in the future.”

However, in Renxigou, except for a few wine companies such as Hanwang Wine Industry, the others are mostly smaller wineries or workshops. For these business owners, they are more worried about whether they will face the fate of being directly shut down in the future. The dissatisfaction of wine business owners is that they invested a lot of money last year to support the “four reforms” work and to continue production, but now the company is once again facing the problem of survival. “In order to make a company bigger and stronger, why did the government kill more than a dozen companies here? No matter how big or small, as long as companies are legal and compliant, they should not be discriminated against.”

The relevant video provided by Wu Mingyong shows that on March 2, 2022, the Renhuai Municipal Government convened the heads of 18 enterprises in Renxigou to hold a “Renxigou Liquor Development and Utilization Project Enterprise Symposium”. At the meeting, the government has not yet clarified the relocation plan and compensation plan. A number of people in charge of Renxigou wine companies told China News Weekly that the region has a great impact on the quality of Maotai liquor. Compared with economic compensation, they are more worried about whether they will be able to brew the same wine in the future if they leave here. Wine of the same quality.

In September 2021, the public account “Understanding Wine” published the article “Renhuai Wine Company Mergers and Reorganizations Are Coming”. The article said that as early as 2007, Renhuai issued guidance on the integration of resources for small and medium-sized liquor production enterprises, and planned to complete the integration of small and medium-sized liquor enterprises in two years from January 1, 2008. However, this big integration is not over. For this merger and reorganization, from March 2020, Renhuai began to prepare for the merger and reorganization of wine companies.

The article quoted an insider in Renhuai City as saying that if it wasn’t for the epidemic, this work would have been fully launched in early 2021. This merger and reorganization are very different from the past. In the past, the government was relatively poor and could not spend much money to solve the social contradictions in the process of large-scale integration. Now, the government is relatively rich in finance, and industrial upgrading and environmental protection, and ecological improvement have reached a critical point. This forces the local government to push forward mergers and acquisitions to ensure the healthy development of the Renhuai sauce wine industry cluster.

“Mergers and reorganizations and becoming bigger and stronger are the dreams of several generations of Renhuai’s leaders. However, the strong government intervention and the flexibility of market allocation of resources are two sides of the difficult decision of Renhuai wine companies. Except for Moutai Group, there are very few wine companies in Renhuai. Except for state-owned holding companies, most of them are small-scale private companies.” The article analyzed that they prefer the government to lessen the strong integration of “lalang matching” style, but let the market allocate resources. However, if mergers and acquisitions are not carried out, it will be difficult for the government to supervise small, scattered and disorderly wine companies. Once the Chishui River suffers major environmental pollution, it will be difficult for the Renhuai sauce wine industry to resist ecosystem risks.

Some analysts believe that the measures taken by the Renhuai Municipal Government to transform and upgrade local wine companies, mergers and reorganizations are the general trends, which is conducive to cultivating and expanding the cluster of key liquor enterprises and standardizing the order of liquor production and operation. However, in this process, how considering the legitimate demands of enterprises also tests the government’s governance ability.

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Nancy Huang
I'm a journalist in Shenzhen, China. I have been working in several news agencies in China since 2008.

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