Leading Moutai to become a market leader, yet ending up in prison for bribery.

Compiled from: Guiyang Intermediate People's Court
 
Case review
On the morning of September 23, 2021, the Guiyang Intermediate People's Court of Guizhou Province publicly pronounced the first-instance verdict in the bribery case of Yuan Renguo, former deputy director of the Economic Committee of the 12th Guizhou Provincial Committee of the Chinese People's Political Consultative Conference. The defendant Yuan Renguo was sentenced to life imprisonment for the crime of bribery, deprived of political rights for life, and had all personal property confiscated; all illicit gains and their proceeds from Yuan Renguo's bribery were recovered and turned over to the state treasury.

 

The trial established that from 1994 to 2018, the defendant Yuan Renguo, taking advantage of his positions as deputy manager of Guizhou Moutai Distillery, deputy general manager, deputy chairman, general manager, chairman of China Guizhou Moutai Distillery (Group) Co., Ltd., and chairman of Guizhou Moutai Co., Ltd., provided assistance to others in matters such as obtaining Moutai distribution rights, separate distribution, and increasing Moutai supply, illegally accepting property worth over 112.9 million yuan in total.

The Guiyang Intermediate People's Court held that the defendant Yuan Renguo's actions constituted the crime of bribery. Given that 20.5 million yuan of Yuan Renguo's bribery was attempted; after his arrest, he truthfully confessed his crimes and voluntarily disclosed most of the bribery facts not yet known to the investigative authorities; he admitted guilt and showed remorse, actively returned illicit gains, and all bribery proceeds and items had been fully recovered, with statutory and discretionary mitigating circumstances, the court could impose a lighter punishment according to law. The court thus rendered the above judgment.

 
 

 
"Criminal Law of the People's Republic of China" 　
Article 163
[5] Any employee of a company, enterprise, or other unit who, by taking advantage of their position, demands or illegally accepts property from others to seek benefits for them, if the amount is relatively large, shall be sentenced to fixed-term imprisonment of not more than three years or criminal detention and shall also be fined; if the amount is huge or there are other serious circumstances, the sentence shall be fixed-term imprisonment of not less than three years but not more than ten years, along with a fine; if the amount is especially huge or there are other especially serious circumstances, the sentence shall be fixed-term imprisonment of not less than ten years or life imprisonment, along with a fine.
 
Employees of companies, enterprises, or other units who, in economic transactions, use their positions to violate state regulations by accepting various forms of kickbacks or handling fees for personal possession shall be punished according to the preceding paragraph.
 
Personnel engaged in public service in state-owned companies, enterprises, or other state-owned units, and personnel dispatched by state-owned companies, enterprises, or other state-owned units to non-state-owned companies, enterprises, or other units to engage in public service, who commit the acts in the preceding two paragraphs, shall be convicted and punished according to Articles 385 and 386 of this Law.
 
Article 385
If a state employee takes advantage of their position to request property from others, or illegally accepts property from others to seek benefits for them, it constitutes the crime of bribery. If a state employee, in economic transactions, violates state regulations and accepts various types of kickbacks or service fees under different names, and keeps them for personal use, it is also considered bribery.
 
Article 386
For those who commit the crime of accepting bribes, punishment shall be imposed according to the amount of bribes accepted and the circumstances, in accordance with Article 383 of this Law. Those who extort bribes shall be given a heavier punishment.

 
 

[1] The author's perspective
Marx once quoted a famous saying in his book: "If there is a 10% profit, it guarantees to be used everywhere; with a 20% profit, it becomes active; with a 50% profit, it takes risks; for a 100% profit, it dares to trample on all human laws; with a 300% profit, it dares to commit any crime, even at the risk of hanging." This saying is truly fitting for Yuan Renguo today.
 
As is well known, Moutai liquor is called China's "national liquor." In fact, this concept was also introduced by Yuan Renguo, who single-handedly turned Moutai from sluggish sales to a state of supply falling short of demand. Additionally, he established a channel dealer system and adjusted the price of Feitian Moutai more than ten times. The price of Moutai rose from 200 yuan per bottle in 2000 to 2,000 yuan per bottle in 2011, a tenfold increase in a decade. Besides price adjustments, "issuing approval slips" also became a unique feature of the dealer system under the "Yuan Renguo era." It is evident that Yuan Renguo was a very business-savvy person. Years ago, he knew how to set concepts, positioning Moutai at high-end banquets and making drinking Moutai a symbol of status. During his tenure, Moutai's development soared, even surpassing former liquor industry giants like Wuliangye, thus becoming the new leader in the liquor industry.
 
But it was precisely the fertile ground cultivated by Yuan Renguo himself that nurtured his crime of accepting bribes. Due to the scarcity of Moutai resources and Yuan Renguo's successful marketing strategy, even Moutai dealers needed approval slips to purchase goods. There was a huge gap between Moutai's factory price and retail price. Under these circumstances, an approval slip meant a fortune. According to the CCTV documentary "National Supervision," a dealer once gave him a 5-kilogram gold tripod to curry favor. Thus, Yuan Renguo, holding the power of issuing approval slips, embarked on a path of crime with no return. It is noteworthy that among the 16 Moutai executives investigated, at least 8 were responsible for sales, accounting for half of the total executives investigated. It is clear that the system created by Yuan Renguo ultimately became the hand that pushed him into the abyss. Truly, success and failure both stem from the same source.