Kweichow Moutai Co.Ltd(600519) (600519. SH) fired the first shot at raising prices in the new year.
At the beginning of the new year, the retail guide price of Maotai liquor (treasures) just upgraded and listed increased by 100 yuan to 4599 yuan / bottle, and the retail guide price of Maotai liquor increased by 1000 yuan in 15 years, from 4999 yuan / bottle to 5999 yuan / bottle. On January 4, the reporter of times weekly confirmed the above news from relevant people in Maotai.
Before the 53 degree price increase of ordinary Feitian Maotai liquor was implemented, Maotai made efforts to improve the retail price of ultra-high-end products, opening space for Maotai to adjust the product structure and raise the price curve.
At present, Maotai has initially formed a core product echelon with a suggested retail price of 1499 yuan, 2599 yuan for Chinese Zodiac wine, 3299 yuan for fine wine, 4599 yuan for colored glaze treasures and 5999 yuan for 15 years in Maotai. In addition to the Chinese Zodiac liquor, there are few new product launches in Maotai in recent years. On December 29, 2021, Kweichow Moutai Co.Ltd(600519) launched an ultra-high-end liquor – Kweichow Moutai Co.Ltd(600519) liquor (treasure), and the echelon of non-standard products was further improved.
Less than a week after the launch of Maotai liquor (treasure), Maotai raised its recommended retail price by 100 yuan. The market believes that Maotai’s move is to carefully test the market’s feedback on price adjustment and release a positive signal.
Baijiu Cai Xuefei, a liquor analyst, told the times weekly reporter that Moutai liquor (rare goods) and old wine were located in the super high-end market, mainly facing the collection and investment consumption market. Taking into account the limited characteristics, more value is to improve the Moutai ultra high end product matrix, enrich the brand connotation, expand Moutai’s high-end price boundaries, and help to improve Moutai’s profits. It is also more a tentative price management, paving the way for the next price adjustment in Maotai.
“The high-end market share of Maotai is supported by the concept of brand, scarcity and high-end channels. The retail price of Maotai liquor (treasures) is lower than that of Maotai Vintage liquor and higher than that of ordinary Maotai liquor, which is the space for the price increase of non-standard Maotai new products. Moreover, Maotai ultra-high-end liquor is aimed at the people at the top of the pyramid, who are not sensitive to the price, and the price increase can add points to the brand and sales.” Xiao Zhuqing, a Baijiu expert, told the times weekly reporter.
Compared with ordinary flying Maotai, non-standard Maotai liquor, as a super high-end product to meet the differentiated needs of consumers, faces relatively less pressure when raising prices, which is also a common means of “curve price increase” in Maotai.
In March 2021, Maotai raised the ex factory price of the year of the ox chinese zodiac to 1999 yuan / bottle, compared with 1299 yuan / bottle of the year of the rat Chinese Zodiac wine, and the retail guide price from 1699 yuan / bottle to 2499 yuan / bottle; The ex factory price of high-quality Maotai is raised from 2299 yuan / bottle to 2699 yuan / bottle, and the retail guide price is raised from 3199 yuan / bottle to 3299 yuan / bottle.
In fact, this “curve price increase” method of Maotai has already been used in Feitian Maotai liquor. Since the factory price of Feitian Maotai liquor was raised to 969 yuan / bottle in 2018, Maotai has not raised the price again. However, Maotai has continuously expanded the proportion of direct sales channels in recent years, which is actually a disguised price increase. The price of Feitian Maotai liquor from Maotai suppliers in super direct sales channels is 1399 yuan / bottle, 430 yuan higher than the ex factory price of 969 yuan / bottle to traditional dealers.
In addition, Maotai has also explored the measure of unplanned quota price increase, and has also conducted a prudent test in terms of ex factory price. According to the research reports of several securities companies, in December 2021, the distillery added about 800 tons of pumao to the dealers out of plan. Its source of goods came from the unused quota within the group’s connected transaction limit. The dealers took the price of 1479 yuan / bottle, or became a signal for Maotai to relax the guidance price of 1499 yuan / bottle.
Debang Securities believes that the increase of dealers’ purchase price has not caused the synchronous rise of wholesale price, nor has it brought negative social impact. It should be more optimistic about the price of Maotai.
Since Ding Xiongjun became the new chairman of Kweichow Moutai Co.Ltd(600519) at the end of August 2021, he has repeatedly released the signal of market-oriented reform in public and put forward the “reform of marketing system and price system”. Recently, the market’s expectation of Maotai price rise has been heating up.
On the first day of 2022, Kweichow Moutai Co.Ltd(600519) released the performance forecast for the whole year of 2021. The company is expected to achieve a total operating revenue of about 109 billion yuan (including about 93.2 billion yuan of Maotai liquor and about 12.6 billion yuan of series liquor), an increase of about 11.2% year-on-year; The net profit attributable to the shareholders of the listed company is expected to be about 52 billion yuan, a year-on-year increase of about 11.3%.
Xiao Zhuqing told the times weekly that Maotai’s production capacity is solidified and can not increase production capacity indefinitely. There are only two directions for Maotai to increase revenue in the future: first, increase the supply quota of direct channels; Second, increase the unit price of non-standard Maotai and ordinary Feitian Maotai. After Maotai launched Maotai liquor (treasure), raise the price immediately, or warm up the price rise of ordinary flying Maotai, improve the market expectation, and then choose to raise the price at an appropriate time in the future.
XinDa securities research report pointed out that Moutai as a benchmark for industry, its products, prices and so on have certain leading and demonstration effects, Baijiu ultra high end, high-end price band or will further open up the channel. Both the future price adjustment of Feitian Maotai and the new listing of the rare Maotai are of great significance to straighten out the price mechanism of Maotai liquor. On the one hand, it thickens the profit through the high-end product line, on the other hand, it reduces the channel gross profit space, which is conducive to Maotai channel reform and market-oriented operation.
(times weekly)
