Moutai price collapsing due to government spending restrictions

By Dawn Wang

The price of luxurious Chinese liquor Moutai, famous/notorious for being a firm favourite of government officials, has sunk by more than 60 percent, according to Sina Finance.

Standard 53-degree Feitian Moutai has dropped from a price of 1,960 yuan in 2012 to around 920 yuan per bottle now.

Sina quotes a Beijing liquor wholesaler Mr Lü suggesting that the price drop is due in part to government restrictions forbidding officials from spending excessive amounts of public funds on dining and drinking. Moutai isn't the only victim of Party alcohol austery, Wuliangye and many other first class baijiu brands have also seen a steep drop in price.

A food industry research specialist pointed out that liquor dealers are cutting prices due to the decline in demand for luxury brands of baijiu. Liquor stores have stopped stocking expensive products like Moutai as dealers predict further price decreases in the future.

In response to this trend, Kweichow Moutai Distillery Group has already begun targeting middle class drinkers. The Chinese Securities Daily quotes CEO of Xifeng Liquor Keqiang Xu saying that the new government spending restrictions can be a fabulous opportunity for mid-market liquors.