Chinese Distiller Kweichow Moutai's Price Drop Sparks Market Concerns
Luan Li | Lin Zhiyin
DATE:  Jun 12 2024
/ SOURCE:  Yicai
Chinese Distiller Kweichow Moutai's Price Drop Sparks Market Concerns Chinese Distiller Kweichow Moutai's Price Drop Sparks Market Concerns

(Yicai) June 12 -- As a key indicator of the prosperity of China's liquor sector, the recent fall in the wholesale price of industry giant Kweichow Moutai's 53 percent alcohol by volume Moutai Flying Fairy has caused market concerns.

The wholesale price of Moutai Flying Fairy, the core product of the Moutai series, dropped to CNY2,430 from CNY2,510 (USD340 from USD352) a bottle yesterday from the start of this month, according to data from several private liquor pricing platforms. Other products from the series have had similar declines.

"The fluctuation in liquor prices is mainly seen in bulk Moutai Flying Fairy," the owner of a liquor store in Jiangsu province told Yicai. During the '618' online shopping festival, sold Moutai Flying Fairy at CNY1,499 per bottle, compared with a market retail price of CNY2,700 a bottle and lower than middlemen's wholesale price, the person noted.

Combined with the weak liquor market during this year's three-day Dragon Boat Festival holiday, market expectations for the price of Moutai Flying Fairy were suppressed, the store owner added.

The wave of subsidies and traffic-driven promotions by e-commerce platforms has led to a decline in the market price of Moutai Flying Fairy, harming the interests of middlemen that stockpile it at high prices, Cai Xuefei, a liquor industry analyst, told Yicai. However, merchants voluntarily lower prices to boost sales, while the issue of insufficient demand in the Moutai market can be solved only by waiting, Cai said.

Due to weak demand for high-end liquor, the wholesale price of Moutai will likely continue to fluctuate and decline, according to a new research report by SDIC Securities. The market is concerned that the expectation of falling prices will not only weaken investment demand but also prompt the release of some collectible products.

Shares of Kweichow Moutai [SHA: 600519] closed up 0.2 percent at CNY1571.68 apiece in Shanghai today, after tumbling 3.1 percent yesterday.

Editor: Martin Kadiev

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Keywords:   Kweichow Moutai Co.