11th January, 2017 by Natalie Wang
Some leading Baijiu brands have increased their prices by up to 50% ahead of the Chinese New Year – usually the peak season for liquor sales in China – a recent report has revealed.
In some cases, the price hikes happened in little over a year. A report by Chinese official news agency Xinhua revealed that the price for a bottle of ’53 degree Moutai had gone up from 2015’s price of 800 RMB (US$115) to 1,200 RMB (US$173) by December last year.
The jump put in motion what Xinhua called “a massive rising trend” for various well-known Chinese Baijiu brands including Wuliangye, Luzhoulaojiao, Fenjiu, Langjiu and Jianglanchun.
Honghualang, from Sichuan province in southwest China, raised its ex-factory prices for its two most popular brands by 10% on 5 January, while Jianlanchun’s ‘Crystal Sword’ upped its ex-factory price by 10 RMB.
The ex-factory price does not include additional costs including shipping and taxes, which means final retail price is much higher than ex-factory price.
The new round of pricing could be as a result of the anticipated sales growth during Chinese New Year, an overall smaller liquor production and rising demand for personal and business consumption rather than government consumption, a trade official from Hunan province in central China, told Xinhua.
Rising manufacturing costs are also pushing liquor companies to adjust their prices. Xiao Zhuqing, a Baijiu sales expert, pointed out costs from logistics to grains to even bottling materials have gone up by 30%.
In 2017, prices for well-known Baijiu brands will likely continue as both Moutai and Wuliangye announced plans to tighten supplies, the report also said.
To date, Moutai’s market value has hit 442 billion RMB, (US$60.5 billion), making it the world’s second most valuable liquor company after Diageo.