Did a Chinese Oil Executive Consume $243,604 in Booze?

Did Lu Guangyu, the general manager of Sinopec’s Guangdong branch, really drain four hundred and eighty bottles of vintage Moutai and six hundred and ninety-six bottles of red wine?

That’s exactly what his employer says, and it’s sticking to it. I’ve written now and then about high-end innovations in China’s alcohol consumption, but this one has even more intriguing implications—the kind of implications that might make you wonder about the company’s books if you trade its stock. The story began a few weeks ago when apparently disgruntled employees posted a few invoices that reportedly showed Sinopec executives expensing a bottle of Château Lafite Rothschild 1996 for $1,813, and several bottles of high-end Moutai for $125,510. Furor ensued, and eventually it became clear that the full bill was larger; a quarter million dollars in high-end booze was unaccounted for. At a press conference last week, Sinopec promptly hurled Lu under the bus, and declared the matter settled.

Leaving aside the problem of outing an employee by name for an ostensibly epic substance-abuse problem, a few questions remained, and the Chinese press deserves credit for asking them. As the Global Times put it in an investigative piece credited to Li Xiang and Zhang Han: “The price of Moutai has risen quickly in the past two months, with a hike of around 350 yuan ($53.73) a bottle since Spring Festival, making it unaffordable for ordinary people. Some insiders believe that the price is actually an index for China’s corruption.”

An index, indeed. The reporters spoke to four Sinopec employees, one of whom said:

Most of the luxury liquor Lu bought was used to bribe local authorities, as Sinopec’s expansion strategies, such as opening new gas stations, preferential policies on transportation and tax, and even paying people off to overlook pollution, all require a benign connection with local authorities ... Keeping this “fragile” connection going is paid for through gifts. In other words, bribes. The emphasis above is mine. It’s a vivid picture: booze from a public company to overlook pollution and avoid taxes—and it helps explain why Wen Jiabo referred to corruption recently as a “(http://www.chinadaily.com.cn/china/2011npc/2011-03/09/content_12138551.htm)” that threatens the health of the nation. As Li and Zhang found:

All four interviewees working at Sinopec contacted by the Global Times said that huge spending on alcohol is omnipresent. "At every festival, giving gifts, especially costly ones, to your leaders who have been taking good care of you is a backdoor form of etiquette known to all, so a small part of the alcohol can be found in the drink cabinets of Sinopec’s top leaders,” an accountant working at Sinopec Yangzi Petrochemical Company Ltd told the Global Times anonymously.

So, what of old Lu Guangyu, whose name has been drenched in ignominy in all this? Perhaps he did have a sip or two, but a quarter million dollars’ worth seems ambitious. As a Sinopec employee explains: “Lu could certainly never consume this astonishing amount of luxury alcohol by himself, given he’s in his late 50s and about to retire.” If that’s a reason not to doubt him, it makes me wonder what the younger staff is up to.

Photograph by Mark Bussinger, Wikimedia Commons.