Retail Prices of Moutai Increase More Than CNY 200

Source: China Economic Net, ChinaScope Financial (Data)

+       The 53-degree Flying Moutai of Kweichow Moutai (600519: SHA) was offered in supermarkets at around CNY 1,800 a bottle, much higher than the manufacturer suggested retail price (MSRP) of CNY 1,519.

+       On September 3, Moutai raised the ex-factory prices of some of its liquor products by 20-30 percent but kept the MSRP the same. Consequently, distributors’ margin was narrowed.

+       Unlike in previous occasions, the price hike of Moutai has yet to cause a chain effect among its competitors, including Wuliangye Yibin (000858: SHE), Jiangsu Yanghe Brewery (002304: SHE), and Lu Zhou Lao Jiao (000568: SHE).

The margin between ex-factory and retail price of Chinese luxury brand liquor is extremely thick, so price hikes might not immediately pass through to consumers. However, the move might be a preparation for future retail price increases.

If you'd like to receive a daily e-mail update of ChinaScope Daily Dim Sum Newsletter, please contact us:newsletter@chinascopefinancial.com. If you'd like to try out ChinaScope Database, apply for a trial here