“We can accept various kinds of liquor here, especially high-end Baijiu such as Moutai and Wuliangye Yibin Co.Ltd(000858) . Now Moutai is a premium purchase, at least 1000 yuan per bottle.” A “scalper” who has been engaged in liquor business for a long time is introducing his receiving price.
First financial reporter recently found that there are many such cattle, which is actually caused by the scarcity of high-end Baijiu products, price rise and control. Baijiu Baijiu Baijiu Chinese Baijiu (liquor) industry has been rising since 2015, and the price of high-end liquor has been rising. It has also become the main support for the growth of Baijiu enterprises, and liquor enterprises are constantly pushing up the price of high-end liquor through controlling goods and holding prices.
In 2013, the state launched a round of antitrust investigation on the Baijiu industry and punished some of the liquor companies. With the increase of the price of liquor, the market also has voices questioning whether Baijiu enterprises’ control of price and price limit are a monopoly behavior.
high-end Baijiu prices continued to rise
China’s “Baijiu” policy in 2012 triggered the collapse of a price system for high-end liquor in China, and ended the last “golden ten years” of the Baijiu industry.
Chinese Baijiu Chinese Baijiu Baijiu Baijiu has been rapidly revival since 2015 and has entered a new cycle of industry. The trend of liquor consumption upgrading is obvious. The market focused on the famous Baijiu liquor brand, followed by the continuous rise of the price of high-end liquor. Now the core price of the mainstream liquor industry has surpassed the price of the liquor industry in the peak period of 2012.
Maotai and Wuliangye Yibin Co.Ltd(000858) are also typical representatives. It is recalled that their prices have completed the U-shaped reversal.
In 2011, the ex factory price of 53 degree flying Maotai was only 619 yuan, but at that time, the market price of flying Maotai had risen to 2000 yuan / bottle. In September 2012, Maotai raised the ex factory price by 33% to 819 yuan / bottle, and the market price quickly broke through the high point of 2300 yuan / bottle.
With the introduction of the “eight provisions”, the ex factory price of Maotai in 2014 was still 819 yuan / bottle, while the retail price fell below the 1000 yuan mark.
After 2015, the market price of Maotai began to rise rapidly. Although up to now, the ex factory price and market guide price of Maotai are 969 yuan / bottle and 1499 yuan / bottle, in terms of the actual market transaction price, the price of Feitian Maotai is 53 degrees, the price of Feitian Maotai has exceeded 3000 yuan / bottle, and the whole box is more than 3500 yuan / bottle.
The situation of Wuliangye Yibin Co.Ltd(000858) was similar. In February 2013, Wuliangye Yibin Co.Ltd(000858) bucked the market and raised the ex factory price of puwu to 729 yuan / bottle, but gave dealers a subsidy of 70 yuan per bottle and various incentives such as quarterly rebate and annual sales rebate. However, the first batch price of Wuliangye Yibin Co.Ltd(000858) soon fell to about 510 yuan to 550 yuan / bottle. In 2014, Wuliangye Yibin Co.Ltd(000858) had to reduce the ex factory price to 609 yuan / bottle, The market guide price was lowered from 1109 yuan to 729 yuan / bottle. Up to now, the batch price of the eighth generation Wuliangye Yibin Co.Ltd(000858) puwu has stabilized at about 1000 yuan, nearly doubling compared with the same period in 2015.
China’s Baijiu Baijiu Baijiu is a rising consumer price of high-end liquor. The price of high-end liquor is related to the growth of consumption of high-end liquor in China. Besides, the technological moves taken by Baijiu enterprises have also promoted the continuous rise of high-end liquor prices.
On the one hand, Baijiu enterprises continuously increase the factory price of the core products, and make a substantial price by stopping the goods and controlling the goods. On the other hand, liquor enterprises will agree on the minimum price with dealers. While increasing the ex factory price, they will also require dealers to simultaneously increase the minimum price, and formulate a strict punishment plan to punish dealers who do not implement the minimum price policy.
\u3000\u3000 “Some high-end Baijiu are very strong suppliers. We have quota as channel merchants. We must face many rigid conditions when we get goods. But because some high-end Baijiu are very scarce products, we have been able to get the supply of goods, so we have been able to provide the so-called market guidance price for suppliers. We dare not do any price adjustment, nor can we. Random transfer of goods must be sold in strict accordance with the region. There are certain reservation and purchase restriction conditions for consumers’ purchase. After all, the goods of such strong suppliers are scarce and very popular. Besides some high-end Baijiu, there is a similar brand of brand drinks and grain and oil products that you have never expected. The common point of these strong suppliers is that they sell well and dare to be out of stock, that is, because their goods sell well, they become important commodities of channel providers, but also rely on their best-selling, so suppliers take out of stock as a means. If the sales channel providers do not sell according to their prices and regional distribution requirements, they will be out of stock immediately, and once out of stock, it will seriously affect the performance of channel providers. There are many best-selling products, but suppliers who dare to break them are rare. Therefore, some suppliers, including some high-end Baijiu, have become the strong ones who can control the channel business. An unnamed retail channel told the first financial reporter.
Li Ming, a Shandong liquor merchant, told the first financial reporter that he had represented many Chinese Baijiu enterprises, and there were clear minimum selling prices and contents of the sales area in the agreements signed by both sides. When signing a contract with the winery, the dealer shall pay a deposit to the winery according to the market level, ranging from tens of thousands to hundreds of thousands. The winery will also give the dealer corresponding fee support, but there will be corresponding penalties in case of breach of contract. In the era of big data, there are bottle codes for bottles and box codes for boxes. It is very difficult for dealers not to find violations.
The first financial reporter saw on the legal documents online that in April 2021 Baijiu contract dispute case, we could see some of the contractual content.
In the case, Beijing kangyiquan Internet Technology Co., Ltd. (hereinafter referred to as “kangyiquan”) signed a contract with Nanjing jiuxiting Supply Chain Management Co., Ltd. (hereinafter referred to as “jiuxiting”) to purchase a batch of 425ml Wuliangye Yibin Co.Ltd(000858) . The contract signed by both parties contains clear price control terms, which stipulates that kangyiquan company must sell products in strict accordance with the unified retail price and retail minimum price agreed in the contract. If the price is lower than the specified minimum price, it will be fined 20000 yuan / time once confirmed; Kangyiquan company shall not sell the products agreed in the contract to any channel other than those agreed in the contract. Once confirmed, kangyiquan company shall buy back at 1.2 times the minimum retail price, and impose a penalty of 20000 yuan / time. Party A has the right to terminate the cooperative relationship after violating the rules for two or more times.
In addition, the contract also stipulates that kangyiquan company shall ensure that it will never enter the channels that seriously disrupt the price system, such as retail link, easy wine batch, pinduoduo and local wholesale markets, otherwise it will be subject to double penalties for violations.
Zhang Hu, a Hebei wine merchant, told the first financial reporter that the salesman of a well-known sauce wine enterprise in China, which he acts as an agent, will send a price adjustment notice or document to ask the dealer to implement it. If the violation is found, the manufacturer will also deduct points from the dealer while imposing a fine. If all the points are deducted, the winery will directly cancel the cooperation with the dealer.
“Sometimes you don’t need to check the winery, and your peers will stare at you.” Zhang Hu said.
Controversy over monopoly of Baijiu
At the end of 2012, after the crisis of plasticizer, the market prices of high-end liquor such as Moutai and Wuliangye Yibin Co.Ltd(000858) had a sharp decline. So Baijiu Baijiu enterprises adopted the policy of price fixing and price protection. Maotai and Wuliangye Yibin Co.Ltd(000858) even announced the punishment measures for some dealers who sell their products at low prices, and asked the market to limit the price.
But this action also triggered the state’s antitrust investigation of the Baijiu industry. In January 2013, Moutai and Wuliangye Yibin Co.Ltd(000858) cancelled the price limit order respectively. But because of the price monopoly, the two companies were fined 247 million yuan and 202 million yuan respectively by the Guizhou Provincial Price Bureau and the Sichuan provincial development and Reform Commission in February 22nd. The penalty was 1% of the two liquor companies’ sales in the last year.
After 2015, with the rapid rise of high-end Baijiu prices, the relevant departments have held several reminders or warning sessions in recent years to remind wine companies to operate according to law, conduct regular thorough self-examination, control their own business practices and strengthen self-discipline, but have not triggered any anti monopoly investigations.
Shi Jichun, a member of the expert group of the anti monopoly law and professor of Renmin University of China law school, told the first financial reporter that according to the basic principle of market allocation of resources, Baijiu and its price were regulated by the market, while anti monopoly law enforcement was a government act, and the market knew more about the market than the government. For fraud, unclear pricing, damage to competition and other acts, the government should not interfere with the market behavior of enterprises, otherwise it may cause damage to the market and consumers.
However, the price of high-end Baijiu and price limit behavior has also aroused some social doubts.
Liu Xu, a special researcher of the National Strategic Research Institute of Tsinghua University, told the first financial reporter that the behavior of wine enterprises agreeing to limit the price of sales is suspected of violating the clause prohibiting the restriction of the minimum resale price in Article 14 of the anti-monopoly law.
Liu Xu believes that the sales policy combining this kind of price increase and resale price is the main way to push up the price of high-end baijiu. The premise of raising prices is that the manufacturers demand that dealers should not lower the price after raising prices and sell stocks before. In order to keep the retail price from falling and even continue to push up the rise of retail price, upstream manufacturers often limit the minimum resale price. In order to protect the operation freedom of dealers and ensure the price competition within and between brands, most countries such as China and the EU adopt the principle of “principle prohibition, exception and exemption” for limiting the minimum resale price. Business operators may provide evidence on their own that their acts comply with the provisions of Article 15 of the anti monopoly law. However, because limiting the minimum resale price will usually harm the interests of consumers, there has been no precedent in the anti-monopoly law enforcement practice of various industries in China in the past 10 years.
For the first mock exam, Liu Xu, though the dealers who are looking up the high-end Baijiu can benefit from the appreciation of stockpile, this mode will damage the interests of consumers. Moreover, restricting the lowest resale price and controlling the online distribution channels will distort price competition, make the market lose the function of testing brand value, and with the dealer inventory buffer, it is difficult for the outside world to understand how many Baijiu Baijiu is actually consumed and how much is hoarding in the channel, which is conducive to making the liquor making enterprises more beautiful on the books. Push up the share price of its listed companies.
However, the Baijiu enterprise can not simply judge whether the operation is “monopoly”.
Shi Jichun told the first financial reporter that there are provisions on vertical monopoly agreements in the anti-monopoly law, but whether the vertical monopoly agreement is illegal should be analyzed for rationality. The standard of analysis is whether the vertical monopoly agreement damages competition. Generally speaking, vertical monopoly agreements will not harm competition, because vertical monopoly agreements are usually agreements within brands, and there is still fierce competition between brands. Vertical monopoly agreements are conducive to maintaining the image of brands and the stable operation of enterprises, as well as maintaining market order. Enterprises with improper vertical restrictions may be punished by the market at any time, Therefore, it can be adjusted by the market, and the subjective judgment of the government usually does not meet the laws and requirements of the market.
According to Shi Jichun’s observation, foreign anti vertical monopoly cases usually recognize the legitimacy of vertical monopoly agreements, and there are basically no cases that judge the violation of monopoly agreements. Therefore, Baijiu liquor monopoly agreement, as long as the minimum price is not high enough, it is difficult to say that it is unreasonable and illegal.
The first financial reporter noted that during the trial of the above-mentioned case, kangyiquan company also proposed that the purchase and sales agreement signed by it contains relevant provisions that shall not be lower than the minimum price, which is a standard provision and violates the relevant provisions of the anti-monopoly law and should be invalid. In the actual judgment, the court did not support this claim and held that the purchase and sales agreement involved in the case was the true expression of intention of both parties, did not violate the provisions of the law and should be valid.
high-end Baijiu price logic
In some network platforms, we can often see the so-called high-end Baijiu purchase strategy and price comparison. For example Baijiu panic buying liquor on a network platform, it lists Moutai panic buying strategy: Tmall is 20:00 every day rush to buy; At 12:00 a.m. and 8:00 p.m., jd; Suning buys Feitian Maotai at 9:30 every morning; Xiaomi Youpin buys Feitian Maotai at 10:00 a.m. and 8:00 p.m. every day; Wumart supermarket multipoint app is to rush to buy Feitian Maotai at 9:00; Gome snapped up flying Maotai at 20:00 every day; Netease strict election is to rush to buy Feitian Maotai at 11:00 and 22:00 every day; Carrefour supermarket is at 10 a.m. every Thursday and needs to make an appointment in advance; SF preferred to rush to buy at 10:00 every morning and make an appointment in advance.
Even consumers who buy Baijiu have their own circles. Apart from the above exchange strategy, they will compare the different types of Baijiu subdivision products and price fluctuations on the market, and how to identify genuine wine and fake liquor. “Because of the strong market position of high-end Baijiu, in a sense, it is not only a drink but a transaction characteristic. The price of high-end Baijiu has been very strong.” The above-mentioned retail channel providers, who asked not to be named, told the first financial reporter.
There is another understanding in the industry for the price of Baijiu. The reason why high-end Baijiu is strong in price is its own particularity, not entirely driven by market supply and demand and cost factors.
Baijiu Baijiu has its scarcity. The high-end liquor often has a longer production cycle and storage time. The capacity of the unit is relatively limited. With the upgrading of China’s consumption, consumers’ change to less alcohol and alcohol also enhances the scarcity of high-end baijiu.
The Baijiu Baijiu is not a product of information symmetry, and consumers can not simply judge its value through products. Therefore, price is a major indicator of the value of high-end liquor, and Baijiu is also a social commodity, and the price belt and the name of the river become more important.
Baijiu Baijiu Cai Xuefei, an analyst at Baijiu, told the first financial reporter that the low-end liquor is still a fast food product, but the high-end liquor tends to be a social consumer product. Premium premium of high-end Baijiu comes from product basic attributes such as the scarcity of production technology, product quality and output. At the same time, the mental cognition of consumers also supports the high premium, which includes the long-term brand and product value building of enterprises, including advertising, consumer quality education and so on.
In the interview of the first finance and economics reporter, some dealers believe that the wine culture in China is also an embodiment of human culture. Therefore, what wine to drink and what wine to give are often considered to be related to feelings and respect.
Therefore, the high price of high-end Baijiu is also closely related to its use scenarios, so as to solve the problem of consumer demand and product experience.
Therefore, if the price of Baijiu Baijiu is limited, most of them are to maintain market order and ensure the stable price system. So high-end liquor is very expensive and limited, and there are also factors to protect the status of the “rivers and lakes”, for fear that their status will be surpassed by other brands, resulting in the reduction of their social value.
Baijiu Baijiu is a kind of consumer goods that can be easily stored. Since ancient times, it has the idea that wine is a good smell. It also has high value liquor and its financial attributes. This avoids the surplus and supports the price system of high-end baijiu.
On the other hand, there are strong demand for price control in Baijiu enterprise’s business mode. Because Baijiu is an information asymmetry consumer product, how to establish a recognized brand and corresponding price cognition in the consumer group has become the key point of business. Therefore, liquor enterprises mostly adopt the strategy of large single product in products, which makes it easier to synchronously promote products, brands and price system in the national market.
However, due to different economic development conditions in different regions, liquor enterprises often adopt different sales support policies in local markets. In addition, liquor enterprises also have different incentive policies according to the business scale of dealers. Although this is conducive to wine enterprises to carry out targeted market development, it is also easy to cause differences in the costs of dealers in different regions. If it is not controlled, it is also easy to lead to market price confusion. Therefore, wine enterprises also attach great importance to this aspect.
Group purchase also has group price demand. The proportion of group purchase channels in high-end Baijiu sales is higher. Dealers say it can account for about 7 of its sales. Group buying mainly depends on personal emotional connections of dealers, and price is part of its personal integrity system. “From the perspective of our distributors, we may not necessarily think that the strong Baijiu suppliers are not good at liquor. On the contrary, we feel that they are not bad, because they are strong in regional and price control, so we are also worried about their worries and have a relatively stable supply of goods and market share.” The above-mentioned retail channel providers, who asked not to be named, described this to the first financial reporter.
Baijiu, a liquor expert who had worked for moderate liquor industry, told Xiao Zhuqing, the first financial reporter, that Chinese Baijiu mainly sells through distribution channels, and the minimum price and strict market control measures are agreed. It is also the main means to maintain market order and ensure the enthusiasm of channel sales. Consumer goods are a fully competitive market. Channels need profits to be willing to sell, and consumers need good consumption experience and cost performance to be willing to buy.
However, the continuous rise of high-end Baijiu prices has also triggered some new problems, such as capital speculation has also been increasingly concerned by the community.
Before the two sessions in 2022, Ding zuohong, member of the National Committee of the Chinese people’s Political Consultative Conference and chairman of the board of directors of Yuexing group, pointed out that the liquor industry has continued to be “hot” in recent years, “High priced liquor” and “high priced liquor” appear frequently, which brings about problems such as abnormal product prices, abnormal market supply and demand, abnormal investment orientation and abnormal social atmosphere. It is suggested to use tax tools to cool down the “high priced liquor” and “high priced liquor” and set traffic lights for capital; Call for strengthening market supervision; And advocate healthy and civilized drinking in the whole society.
Cai Xuefei has different opinions. He thinks that if there is no demand, there will be no supply. The rising price of Chinese Baijiu liquor reflects the consumption concept of “good drinking” to some extent, which is the embodiment of consumption upgrading. Second, the sale is a voluntary relationship between the two sides. High-end Baijiu has its own consumer population, and can also accept high prices, so it can not be denied it.
