Moutai sales boosted by price drop
Print Edition
ONCE a staple at Chinese government banquets, high-end liquor Moutai has been pushing for mainstream appeal after the country’s anti-graft campaign.
In a store in Guiyang, southwest China’s Guizhou Province, customer Wang Qun spent 999 yuan (US$160) on a 500-milliliter bottle of 53-degree Feitian Moutai, the brand’s flagship product.
“This is for a family dinner. In the past when it cost more than 2,000 yuan, I was reluctant to buy. Now the price is much more acceptable,” she said.
The sorghum-based drink produced by Guizhou-based Kweichow Moutai Co, is a luxury brand of baijiu (white alcohol) which has long been a favorite in official and business circles.
The liquor has been in short supply for a long time, and its prices climbed to 2,000 yuan per bottle in 2012.
However, demand among elites has plunged since December 2012 when the central government initiated a frugality campaign and started to clamp down on luxury spending by officials.
Consequently, distributors were forced to slash their prices by more than half, putting it within reach of the average consumer.
“I sold six cases of Moutai in the week before the Dragon Boat Festival,” said Sun, the owner of Shicai Supermarket in Guiyang.
Customers have been buying it almost every day in June, mostly for family dinners, he said.
Liu Dafu, a distributor in Guiyang, was facing huge pressures after losing several of his long-term clients, mostly public organizations, due to the anti-extravagance drive. But as prices have fallen, sales have picked up, he said.
The price of Feitian Moutai dropped from about 2,000 to 1,800 yuan during the first half of 2013. The price fell further to 1,200 yuan in the second half and is now stabilizing at between 900 and 1,100 yuan.
“I sold 30 tons of Moutai last year, which is the same amount as the years before 2013.
“The difference is that most of it is now being sold to individuals and private companies,” Liu said.
As the popularity of the product grows in the mass market, the company has seen a growth in profit.
Statistics show sales last year rose 1.2 percent from 2013, and profits grew 2.3 percent.
“The shrinking of government spending has taken a toll from the white liquor industry, but Moutai would like to take this as an opportunity to transform and thrive,” Moutai’s chairman Yuan Renguo said.
The company is also eyeing the global market.
Over the past three years, it has sold 2,880 tons of liquor overseas and said it plans to open agencies in Russia, the United States, France, South Korea and Japan over the next five years.
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