Mooncake sales in China plunge after anti-graft agency bans use of public funds to buy them

Sales of mooncakes in Guangdong province have plummeted after the country's top anti-graft body banned the use of public funds to purchase the Mid-Autumn Festival delicacy. -- PHOTO: CHINA DAILY/ASIA NEWS NETWORK 
Sales of mooncakes in Guangdong province have plummeted after the country's top anti-graft body banned the use of public funds to purchase the Mid-Autumn Festival delicacy. -- PHOTO: CHINA DAILY/ASIA NEWS NETWORK 

GUANGZHOU (CHINA DAILY/ASIA NEWS NETWORK) - Sales of mooncakes in Guangdong province have plummeted after the country's top anti-graft body banned the use of public funds to purchase the Mid-Autumn Festival delicacy.

Sales in Wuchuan, a major production center for the cakes, are running at 50 per cent of last year's levels, according to the Wuchuan Association of Mooncakes.

Guangdong is famous for the production of Cantonese-style mooncakes. In previous years these have accounted for half of all mooncakes sold nationally and a large proportion of those exported.

The ban was ordered by the Communist Party of China's Central Commission for Discipline Inspection. The festival falls on Monday this year.

Wuchuan, dubbed the country's Mooncake Capital by the All-China Federation of Industry and Commerce in 2012, sold mooncakes worth more than 1.5 billion yuan (S$305.9 million) during last year's festival season, generating tax revenues of more than 100 million yuan.

Mooncake production has become a pillar of the city's economy, with more than 200 companies in the sector employing over 20,000 people, said Mr Zheng Rikang, director of the Wuchuan Association of Mooncakes.

"But mooncakes have become unsalable this year after the central government ban on purchasing them with public funds," Mr Zheng said.

Many companies have cut production by more than 50 per cent, and some factories have closed temporarily due to the poor sales, he added.

Mr Liang Weixing, chairman of producer Fuhai Mooncake, said there had been a large fall in sales even though he was offering discounts of more than 70 per cent.

"Many clients waited in line in my office to purchase mooncakes in previous years, but none have come to order and buy the cakes this year," he said.

Mr Chen Wenxian, an executive in Guangzhou, said his company was not buying mooncakes to send as gifts for government officials and clients this year.

"My company used to buy a large number of mooncakes as gifts for Mid-Autumn Festival," Mr Chen told China Daily. "The cakes were an important element in maintaining business and work relations."

Mr Quan Kewen, the mayor of Wuchuan, has urged manufacturers to sell more of the cakes abroad to help offset the domestic slump.

"The city government is encouraging companies to produce other foods because of the slow sales," Mr Quan said.

According to the Guangdong Entry-Exit Inspection and Quarantine Bureau, companies in the province have exported nearly 1,300 tonnes of mooncakes during the run-up to this year's festival, a slight increase on last year.

The cakes were exported to 19 countries, with North America taking more than half the exports because of the large Chinese population there.