Kweichow Moutai, China's most famous liquor brand has promised a
price cut during the upcoming Spring Festival early next month,
following on the heels of stories of large price rises driven by
strong demand.
"The maximum wholesale price of 53-degree moutai, one of its
best-sellers of this brand, is limited to under 600 yuan (about 82
U.S. dollars) a bottle, and the ceiling price in retail is 700 yuan
(about 96 U.S. dollars), both 50 yuan down from the original
prices," said Yuan Renguo, chairman with the Kweichow Moutai
Distillery Co., Ltd in southwestern Guizhou Province.
The company's U-turn comes in the wake of price increases
reported by Xinhua on January 16. Xinhua reported that 53-degree
Kweichow Moutai was on sale in Beijing's Xizhimen area for 728
yuan, an increase from the previous price of 688 yuan. The company
said at the time that the price increase was a natural response to
rising market demand.
All of moutai's sales agents, including the speciality stores
and counters in shops, were required to cut asking prices within a
week. "Store managers and sales associates will be punished if they
don't abide by the price limits," added Yuan.
The policy came on the heels of an increase in moutai's producer
prices by 20 percent on average, said Yuan, adding that the
increase was a result of the growing cost of production and
insufficient market supply during the festival season.
The Spring Festival usually creates a huge demand in the liquor
market, with strong drink being considered a must-have at family
reunions and a New Year present to relatives and friends.
Moutai was named a national liquor in 1951, two years after the
founding of New China and has since been used on official occasions
to feast foreign heads of state and distinguished guests visiting
China. It is the only alcohol given as official gifts by Chinese
embassies in foreign countries and regions.
(Xinhua News Agency January 20, 2008)