Business Intelligence on Retailing, Franchising, and Consumerism in China

Kweichow Moutai Limits Price Of Alcohol

Yuan Renguo, president of Kweichow Moutai Company, has disclosed to media that the company will be limiting the price of their alcohol in China, which means the wholesale price of the Moutai must not be more than RMB600 and the retail price must not be over RMB700 — both are RMB50 cheaper than the current market price.

Yuan said that as a listed company with excellent performance, Moutai's performance has something not only to do with itself, but also the nation and their shareholders. Yuan said an appropriate increase in Moutai price will bring more taxes for the government. Moutai has issued the price limit notice to all their counters, distributors and throughout their sales network. Moutai says it will effectively supervise the sales channel and offer a set of awards and a punishment system to ensure that the measure can be implemented successfully.

Moutai previously said it would increase the price of Moutai alcohol by 20%. The company said they are obliged to do so because of the increase of production costs and the ever-increasing conflict between supply and demand. However this was followed by discussions in local media that the price hike was too much.

By January 16, 2008, Moutai's market value had reached over RMB210 billion, making it the company with the highest market value in China's alcohol industry.

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