Beijing's ban on officials using public funds to buy mooncakes as Mid-Autumn Festival gifts is set to take a bite out of the country's consumer spending.
"It's certainly going to hurt holiday sales," said Stephen Sheung, investment strategist at SHK Private, noting the Mid-Autumn Festival ranks second among China's holiday sales periods, after the Lunar New Year. For China's shoppers, the two holidays are comparable to Christmas and the back-to-school period in the U.S., he noted.
The round cakes, filled with ingredients such as red bean paste and salted duck eggs, are a big business in China. In 2011, mainland consumers spent around 15 billion yuan ($2.45 billion) on the Mid-Autumn Festival's traditional delicacy, with over 10,000 manufacturers producing more than 280,000 metric tons of mooncakes, according to data from the Hong Kong Trade Development Council.
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Analysts say China's move to bar the use of public funds to purchase mooncakes is in line with Beijing's new drive to stamp out corruption and official extravagance. Mooncake gift packages aren't just about eating; they can be sold to redistributors, which are often conveniently located near government offices.