During the two sessions of the National People’s Congress this year, topics such as “high-quality development of the wine industry” and “cooling down of high priced wine” became the focus of attention of Representatives and members of the wine industry. In recent years, the news about high-end Baijiu price rises and Moutai’s approaching 3000 yuan is frequent. In this regard, Ding zuohong, member of the CPPCC National Committee and chairman of the board of directors of Yuexing group, put forward a proposal to use tax tools to cool down “high priced wine”.
Then, why will “high priced wine” appear in the market? Can the measure of cooling “high priced wine” by using tax tools work?
“high priced wine” is common
“High priced wine” is common in the market. Baijiu China industry analyst and general manager Cai Xuefei, told reporters that China has been increasing prices in several rounds of liquor industry. At present, whether the popular liquor, high-end business wine or gift Baijiu has reached a new price level, “high priced wine” has become the norm.
The market retail price of Feitian Maotai is a major focus of social attention. Although the official recommended retail price of Feitian Maotai is only 1499 yuan / bottle, the real sales price in the market is much higher than this. At the end of last year, the retail price of Feitian Maotai in some areas exceeded 3000 yuan / bottle. A channel dealer engaged in Maotai liquor business told the reporter of China Business Daily that at present, the latest circulation price of Feitian Maotai is about 2800 yuan / bottle.
China’s Shanghai Baijiu consulting partner Gao Jianfeng also told the China Daily News reporter that “high priced wine” is a common phenomenon in the society. In this liquor boom cycle, both the first line liquor and the second line Baijiu are all raising their prices. The emergence of “high priced wine” is also the result of such a price increase to some extent.
“At present, there are all kinds of chaos in the wine industry, including product prices, market supply and demand, investment orientation and so on.” Ding zuohong proposed.
In fact, the profit level of Baijiu industry is indeed at a high level in various industries. According to the data of financial data and analysis tools, the average value of gross profit margin of 19 Baijiu listed companies was 62.4% in 2020, and the average net interest rate was 26.75%. Gross profit margin and net interest rate in Kweichow Moutai Co.Ltd(600519) 2020 were 89.94% and 58.88% respectively.
why is “high priced wine” frequently seen in the market
Why Baijiu frequent price increases, and why will there be “high priced wine” in the market?
Ding zuohong believes that an important reason for the emergence of “high price wine” and “sky high price wine” is capital profit seeking and disorderly speculation. Baijiu Baijiu, a liquor dealer in Liaoning, China (Li Wenyun), told the China Daily News that the key problem of liquor price rising is that the idea of “drinking wine and drinking less” is popular among the people.
\u3000\u3000 Baijiu Baijiu differs from other consumer goods. It has strong social attributes. Many consumers think that buying high priced Baijiu is more face and the shelf life of liquor is longer and even more valuable. Meanwhile, manufacturers often take control measures and price hikes to upgrade their brand image, and they also manage the channel business strictly, if the channel manufacturers do not follow the official recommendation of the manufacturer. Selling Baijiu products at retail prices may be punished. ” Li Wenyun said.
“Baijiu” has deviated from consumption attributes, and has strong financial attributes, thereby stimulating the emergence of “high priced wine”. Cai Xuefei said that “high priced wine” bears the responsibility of brand publicity and brand momentum. Manufacturers need to create brand value and market topic degree through “high priced wine”. The Baijiu quality demand and brand demand surge caused by consumption upgrading are the fundamental reasons for the emergence of “high priced wine”.
Gao Jianfeng believes that in recent years, Baijiu production has declined year by year, and in the environment of stock competition, Baijiu enterprises tend to exchange their price increase for the growth of their performance. Flying Moutai’s price has a guiding role in the Baijiu industry.
Tianfeng Securities Co.Ltd(601162) China Baijiu Liu Chang, chief analyst of food and beverage industry, analyzed the emergence of “high priced wine” on the one hand, because the high-end liquor based on Moutai liquor has strong investment attributes, especially when the current investment target shortage, Baijiu investment is more common. On the other hand, the high-end Baijiu will appear in many high-end social occasions, and become a hard currency in many scenarios.
can tax tools cool it down
Ding zuohong suggested that tax tools should be used to cool down “high priced wine” and “sky high priced wine” and set traffic lights for capital; At the same time, strengthen market supervision and punishment. Crack down on the deliberate bid up of wine prices and profiteering through hoarding, speculation and other means; In addition, healthy and civilized drinking methods should be advocated in the whole society.
Is it effective to use tax tools to cool down “high priced wine”? In this regard, Cai Xuefei believes that taxing “high priced wine” or strengthening the circulation management of “high priced wine” can effectively curb the blind growth of “high priced wine” and maintain the health and stability of the market. In particular, the problem of “high priced wine” is capitalized. Taxation is a way to let the market return to reason and an important strategy to prevent capital from hunting the Baijiu market.
But Gao Jianfeng believes that the tax on high-end Baijiu has long been heard, and the market has certain expectations, but whether tax can really cool the “high price wine” is hard to say. For liquor enterprises with strong brand strength, they can digest and transfer the tax burden. In this way, the tax increase can not bring about the cooling of “high priced wine”, but may further promote its price upward. In fact, the Baijiu industry is fully competitive, cooling or heating up is market behavior, and there should be no human intervention.
Baijiu Baijiu, a Baijiu Baijiu, told China Business Daily that since last August, the relevant departments of the state have specifically discussed liquor enterprises in respect of liquor prices and capital hunting sauce. The liquor market has been rational enough, and sauce wine has also cooled significantly. “Since last year, I have been around the sauce wine people are gradually launched, the market has seen a lot of sauce prices have dropped sharply, a large number of capital also withdrew from the Baijiu market.”
Baijiu China Baijiu, an analyst of liquor industry and Jin Yufeng, a partner of Zhongyuan fund, also told the China Daily News that liquor is a industry that prices are liberalized. The emergence of “high priced wine” has both the intentional guidance of manufacturers and the support of capital and commercial channels. It also cannot do without the underlying logic of consumption promotion. It only needs to see whether consumers choose and approve. There is no need to use administrative means to cool it down.
