China on Sunday banned shark fin for official dinners as part of its austerity drive. The controversial ingredient joins hairy crabs, mooncakes and expensive suitcases as the latest victim of President Xi Jinping’s campaign.
Chinese state media reported that the central government has banned official dinners with shark fin, bird’s nest and wild animal products in a new directive. Xinhua, the state news agency, said government staff would not be able to serve cigarettes and expensive alcohol at official functions.
This comes as Samsonite, the 103-year-old luggage maker, says China sales will show a “certain amount of moderation” this year due to Mr Xi clamping down on extravagant spending.
Ramesh Tainwala, Samsonite’s Asia head, says sales are expected to decline at least 10 percentage points from a growth rate of more than 20 per cent last year to 12-15 per cent this year.
“Because of the austerity drive that is going on with the government?.?.?.?officials are now trying to learn?.?.?.?how they are supposed to react,” says Mr Tainwala. “Will this be considered as, let us say, a luxury or avoidable expense?”
Since coming to power a year ago, Mr Xi has cracked down on excessive spending by government officials. The drive has taken a toll on everything from culinary delicacies such as abalone and exotic crabs to the kind of transportation and hotels that government workers use on official business trips.
One Beijing resident and local official who travels to Nanjing to visit a relative says she was accustomed to being picked up at the airport in a government car. But she says the car has disappeared since Mr Xi became China’s leader.
To power his campaign, Mr Xi, or his propaganda team, has created slogans such as “four dishes and a soup” to urge officials to refrain from the kind of previously ubiquitous banquets that were laced with copious amounts of baijiu or, in more recent years, expensive claret.
In an interview, Tim Parker, Samsonite chief executive, and Mr Tainwala stress that China remains a very important market for the company. Mr Parker says he can “well imagine that in the next sort of three to four years that the company will make its first acquisition of a Chinese business”.
But, in the meantime, Samsonite must join other global luxury brands in navigating the new austere landscape in China. Mr Tainwala says one way the campaign is hurting business is through the impact on corporate gifts. Banks have also cut back on redemption campaigns that allow customers to exchange accumulated points for luggage and other items.
As a result, there has been “a lot of slack” in Samsonite’s sales to businesses in China. Mr Tainwala says airlines that typically buy cases in bulk for flight crews until recently held off, as they tried to interpret the rules being telegraphed by Mr Xi.
“Buying is being looked upon a little bit more carefully and the new rules and regulations and guidelines are getting released,” says Mr Tainwala.
But he adds that recently there are “indications that some of the airlines and banks which operate redemption schemes are already getting started” again.