This week’s rumor about consumption tax adjustment has also dragged down the overall Baijiu sector, and the wind Baijiu index (884705) dropped 5.28% this week. We think that if the consumption tax falls on the liquor business, the impact on the Baijiu enterprises will be short term. In the long run, the market share of the head enterprises will be more favorable.
At present, Baijiu consumption tax is collected from quantity and sales volume. The quantity is collected according to 0.5 yuan per catty. The ad valorem price is calculated according to the price of not less than 60% of the selling price, and the consumption tax is 20%. According to the reform plan of moving the consumption tax collection backward proposed by CPPCC members at the previous two sessions, if the consumption tax is moved to the enterprise sales end after collection, that is, it is collected according to 100% of the selling price, the enterprise consumption tax burden will increase by 8%. If the consumption tax is collected and moved to the dealer’s sales end or terminal, the tax burden will increase not only on the enterprise end, but also on the channel.
In the elasticity analysis of supply and demand, assuming that the supply does not change and the demand is elastic, the tax burden is borne by the seller more, and when the demand is not elastic, the tax burden is borne by the buyer more. Under the assumption of constant income, we judge that high-end Baijiu (gift gift attribute is stronger), demand is also rigid, and more tax burden will be borne by consumers. The demand for second and medium and low end Baijiu is more flexible, and tax will be borne more by wine enterprises or channels.
In the short term, tax reform will have greater impact on the liquor industry of the second and the middle and low end baijiu. But in the long run, the famous liquor enterprises will have stronger ability to transfer (market acceptance) in the reform, and the head enterprises will further expand their market share.
Risk tips:
The impact of the epidemic has increased, has a greater impact on the macro-economy, and has a greater impact on the demand for food and beverage. The company has major management defects, etc.
Review of Hong Kong Stock Market:
This week, the essential consumption index of Hong Kong stocks fell by 0.06%, of which the key companies rose or fell by 1.14% for Zhou Heiya, 0.29% for Yihai international, 10.76% for China Feihe, 3.44% for nongnongshanquan, 3.46% for Mengniu Dairy and 6.07% for Budweiser Asia Pacific.
