Recent news indicates that China National Cereals, Oils and Foodstuffs Corporation (COFCO) is planning to enter the liquor market by acquiring a liquor brand.

Since China's accession to WTO, the state-owned foodstuff import and export company has had to seek further opportunities as more and more foreign and domestic companies compete for their piece of the pie in the Chinese food market. As a result, COFCO has undergone a series of large mergers and acquisitions and expanded its business to agriculture and food-processing, biomass energy production, real estate development and financial services. From this year on, COFCO, intending to build an entire industrial chain model, has followed its action plans to expand its brand portfolio after acquiring 五谷道场(Grains Dojo Instant Noodles), purchasing a 20% share in Mengniu Dairy Company, and launching a pig-raising project.

COFCO is now confidently building a house of brands, with the goal of realizing profits in many different industries. But it will be a challenge to manage well such a large brand portfolio. Even Unilever has had to close down unprofitable brands to enhance company performance. As is said by the Chartered Institute of Marketing, “The biggest mistake is to allow each brand to be managed in isolation because what is right for an individual brand may be wrong for the portfolio.”1 Let’s see if COFCO has the internal branding capabilities to leverage the strengths of individual brands in a way that contributes to the success of the company as a whole.