Panzhou City Second Winery
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Several baijiu companies have raised their product prices, while leading firms are keeping their annual targets unchanged.
Release date:
2021-09-23 12:01
Source:
According to a statement released by the China Alcoholic Industry Association on May 31, while the pandemic has not yet fully subsided, the baijiu industry is already seeing widespread price increases.
Baijiu stocks kicked off June with strong gains, and news of price adjustments by several baijiu companies has also drawn significant attention.
According to a May 31 announcement by the China Alcoholic Beverages Association, while the pandemic hasn’t fully subsided, the baijiu industry is already seeing widespread price hikes. The association reported that at least four liquor companies have already adjusted their pricing: Jiugui Wine increased the strategic price of its 52° 500ml Zitan bottle by 40 yuan per bottle; Xifeng Wine implemented across-the-board price adjustments for several of its directly-operated products, with the Green Bottle series seeing a 20-yuan increase in factory prices; Moutai’s entire range of Jiangxiang-style baijiu products was raised by 10% to 20%; and Jiannanchun has officially rolled out last year’s price hike policy, raising both the terminal supply and retail prices for its 53° and 42° Bofen varieties. Meanwhile, rumors are circulating that even Feitian Moutai may soon follow suit with an increase in its factory price.
Regarding prices at leading liquor companies, according to research by Minsheng Securities analysts, the price of 53° Feitian Moutai (500ml) reached a high of 2,400 yuan last week, but has since experienced a pullback of 30 to 50 yuan, now fluctuating between 2,350 and 2,370 yuan. This represents an increase of at least 100 yuan per bottle compared to the pre-pandemic wholesale price of 2,200 yuan during the pandemic period.
According to a research report from Everbright Securities, since the second quarter of 2020, the wholesale price of the eighth-generation Wuliangye has steadily rebounded, with most regions already returning to around 915–920 yuan. Further recovery in wholesale prices is expected in the coming period.
Regarding this recent market recovery and price increase, the China Alcoholic Beverages Association noted that as of May, domestic COVID-19 pressures have gradually eased, prompting many regions to introduce policies aimed at boosting the economy and stimulating consumer spending. Combined with some compensatory consumption patterns, these factors have sparked a mini-consumption boom in the baijiu industry. Meanwhile, after experiencing lower-than-expected demand, the baijiu sector has now witnessed a notable rebound. Additionally, it’s long been an unspoken rule in the baijiu industry: maintaining higher prices during the off-season while prioritizing volume during peak seasons. Thanks to these layered factors, the traditionally slow baijiu season has defied expectations, proving once again that "the off-season doesn’t have to be dull."
As market conditions rebounded, the baijiu sector also kicked off June with a strong performance in the capital markets. Guizhou Moutai and Wuliangye consecutively hit record-high stock prices on June 1st and 2nd, reaching intraday peaks of 1,427.90 yuan per share and 163.65 yuan per share, respectively. In fact, Guizhou Moutai’s market capitalization briefly approached 1.8 trillion yuan during trading on June 2nd, briefly surpassing ICBC to claim the top spot among all listed companies on both exchanges.
On June 3, Guizhou Moutai's stock price edged slightly lower, closing at 1,399.30 yuan per share—down 0.81% from the previous trading day. Meanwhile, its total market capitalization reached 1.7578 trillion yuan, falling short of ICBC's 1.8497 trillion yuan.
Several senior executives from the beverage companies have also made bullish remarks.
At the recently held Wuliangye shareholders' meeting, Zou Tao, Executive Deputy General Manager of Wuliangye, stated that the company has experienced a noticeable recovery across both its premium and mass-market products since May. Specifically, sales of the flagship brand have already rebounded to over 70% of normal levels in May, while sales of the Jianzhuang light-bottle liquor even surpassed last year's同期 levels. The shareholders' meeting emphasized that major, well-known liquor companies are positioned to lead the industry out of its current adjustment phase. Notably, Wuliangye exceeded its first-quarter targets ahead of schedule, making it highly likely that the company will achieve its double-digit growth goal for 2020.
During the Two Sessions, Moutai Group Chairman Gao Weidong publicly stated that Moutai aims to not only meet but exceed its annual goals—ensuring neither targets are lowered nor reduced—while prioritizing quality and safety, and striving to deliver even more impressive results by completing the year's tasks as efficiently and effectively as possible.
However, Peng Yanyan, Head of Greater China Consumer Goods Industry at UBS Investment Research, pointed out that, according to UBS's assessment, baijiu companies are expected to see relatively weaker second-quarter performance (in terms of revenue and net profit) compared to the first quarter. The primary reason for this is the reduced willingness of distributors to place orders over the past few months, as their operations were severely impacted by the COVID-19 pandemic. Given the long sales cycle typical of the baijiu industry, the first-quarter results reported by baijiu firms earlier this year actually reflected sales conditions before the Spring Festival—and thus haven’t yet captured the full extent of the pandemic’s negative effects.
Keywords:
Panzhou No.2 Winery, Panzhou Wine, Panjiang Wine, Maotai Town Wine, Maotai Town Sauce-Aroma White Liquor, Guizhou Wine
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