Shanghai, Dec 14 - Wine and spirits firm Moet Hennessy, majority-owned by French fashion powerhouse LVMH, is in talks to buy into liquor maker Jiannanchun, an official from the Chinese company's Wenjun Liquor unit said on Thursday.
Jiannanchun owns China's second-biggest brand of baijiu -- a grain and sorghum-based alcohol whose name means "white liquor" -- according to Euromonitor data.
"They may do an acquisition, but they're still negotiating," said a company official at Wenjun Liquor, a unit of Sichuan Jiannanchun Group.
A Shanghai-based spokeswoman for Moet Hennessy declined to comment.
Jiannanchun, based in southwestern China's Sichuan province, claims to have an annual production capacity of 80,000 tonnes of baijiu and last year accounted for 1.8 percent of China's total baijiu sales volume, Euromonitor says.
On Tuesday Diageo Plc said it would buy a minority stake in another Chinese baijiu maker. Diageo, the world's top alcoholic drinks group, has a 34 percent stake in Moet Hennessy, which groups most of LVMH's wine and spirits businesses.
Moet Hennessy said last year it expected China would become one of its top five markets in five years.
Hennessy, Diageo and French rival Pernod are among spirits firms that have long sought to expand in China, where 35 billion litres of beer, wine and spirits were consumed last year, according to Euromonitor data.
LVMH is more than 40 percent owned by Christian Dior SA, which is in turn controlled by Bernard Arnault, the chairman of both groups.