Moutai chairman under fire over price rise defense
By Feng Jianmin |
01:16 UTC+8 April 20, 2011
|
Print Edition
Print Edition
KWEICHOU Moutai, a major high-end liquor maker in China, has come under fire after its chairman said that recent price rises had "improved relationships with the government and shareholders."
The company is also being criticized over claims that they parked a large sum of money at very low interest rates in a local bank, one of whose directors sits on the company's supervisory body.
Ji Keliang, the company's chairman, recently defended a price rise of 20 percent in January as necessary and said it had helped improve the company's profit margins.
"We are bringing higher returns for shareholders and paying more tax to the country," he told China Business Journal on Sunday. "The extent of the price increase is big but we've thus balanced our relationship with the government and other parties."
Ji's comments came after the National Development and Reform Commission criticized recent price increases by domestic distilleries and asked them to maintain stable prices.
Ji said the company had protected consumers' rights by applying a price ceiling for retailers, but a reporter with China's state television found that prices for one best-selling type jumped from 1,200 yuan a bottle to 1,600 yuan after the price rise.
Ji's words renewed public anger that Moutai has considered profits for all parties except for consumers, and that the liquor had become a luxury item often used as a gift for high-ranking officials instead of something for ordinary people.
"The surging price for the liquor is a sign of corruption," said Ye Tan, a independent commentator. "Its prices can continue to rise because its target consumers are not sensitive to prices."
An online post said that "higher prices only reflect the higher status of its drinkers."
The Guangdong branch of Sinopec, China's largest oil refiner, was said to have spent 2.59 million yuan (US$396,400) on drink, including Kweichow Moutai, to be used as gifts during the Mid-Autumn Festival.
Meanwhile, media reports noted that Kweichow Moutai had put 12.8 billion yuan of capital in banks at low interest rates below those determined by the central bank.
"Kweichow Moutai has the most abundant capital among listed companies on the Chinese mainland," China Business News reported. "But while other companies are making considerable fortunes by investing in the financial markets, the company is earning meagre interest."
The newspaper suspected a large proportion of the money was deposited with Zunyi City Commercial Bank. Within 10 years, the bank had grown from Zunyi's smallest to the ninth largest in western China, the report said.
It said one of the bank's directors, Zhang Yi, was a member of Kweichow Moutai's board of supervisors, and a finance officer of its parent company. "The decision to put money aside with low interest can be a measure to transfer benefits by disguise," the newspaper said.
The Kweichow Moutai distillery is located west of Zunyi City in southwest China's Guizhou, Province.
The company is also being criticized over claims that they parked a large sum of money at very low interest rates in a local bank, one of whose directors sits on the company's supervisory body.
Ji Keliang, the company's chairman, recently defended a price rise of 20 percent in January as necessary and said it had helped improve the company's profit margins.
"We are bringing higher returns for shareholders and paying more tax to the country," he told China Business Journal on Sunday. "The extent of the price increase is big but we've thus balanced our relationship with the government and other parties."
Ji's comments came after the National Development and Reform Commission criticized recent price increases by domestic distilleries and asked them to maintain stable prices.
Ji said the company had protected consumers' rights by applying a price ceiling for retailers, but a reporter with China's state television found that prices for one best-selling type jumped from 1,200 yuan a bottle to 1,600 yuan after the price rise.
Ji's words renewed public anger that Moutai has considered profits for all parties except for consumers, and that the liquor had become a luxury item often used as a gift for high-ranking officials instead of something for ordinary people.
"The surging price for the liquor is a sign of corruption," said Ye Tan, a independent commentator. "Its prices can continue to rise because its target consumers are not sensitive to prices."
An online post said that "higher prices only reflect the higher status of its drinkers."
The Guangdong branch of Sinopec, China's largest oil refiner, was said to have spent 2.59 million yuan (US$396,400) on drink, including Kweichow Moutai, to be used as gifts during the Mid-Autumn Festival.
Meanwhile, media reports noted that Kweichow Moutai had put 12.8 billion yuan of capital in banks at low interest rates below those determined by the central bank.
"Kweichow Moutai has the most abundant capital among listed companies on the Chinese mainland," China Business News reported. "But while other companies are making considerable fortunes by investing in the financial markets, the company is earning meagre interest."
The newspaper suspected a large proportion of the money was deposited with Zunyi City Commercial Bank. Within 10 years, the bank had grown from Zunyi's smallest to the ninth largest in western China, the report said.
It said one of the bank's directors, Zhang Yi, was a member of Kweichow Moutai's board of supervisors, and a finance officer of its parent company. "The decision to put money aside with low interest can be a measure to transfer benefits by disguise," the newspaper said.
The Kweichow Moutai distillery is located west of Zunyi City in southwest China's Guizhou, Province.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
