China's Moutai liquor selling well as Spring Festival draws near

13:59, January 11, 2011      

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Renowned Chinese liquor producer Kweichow Moutai is enjoying brisk sales as people around the country prepare to celebrate Spring Festival, or Lunar New Year, the most important traditional Chinese holiday.

"You are lucky because our shop's supplies of 53 degrees Flying Moutai (the best-selling Moutai product) were replenished with a dozen bottles just today. We were out of stock last week," Gong Peihong, a salesperson at Wu-Mart in Beijing, a popular Chinese supermarket, said Tuesday.

"But the price is 1,099 yuan (165.8 U.S. dollars) per bottle instead of 959 yuan. You'd better buy quickly. I guess the remaining 10 bottles will sell out within 12 hours," Gong said.

On Jan. 1 this year, liquor producer Kweichow Moutai raised the wholesale price of a bottle of Flying Moutai by 20 percent, taking it to 619 yuan. Meanwhile, it suggested a maximum retail price of 959 yuan, 90 yuan more than before.

However, many shops are selling Flying Moutai at prices of over 1,300 yuan per bottle in Hangzhou, in central China's Zhejiang province, and one store in south China's Guangzhou City is selling it at 1,990 yuan per bottle.

"The new price applies to Moutai boutiques but not other stores," said Gong.

Xu Youlin, head of the Wine Association of Hangzhou City, partly attributed the short supply of Moutai to the icy weather that has disrupted transportation of the liquor from where it is produced, Guizhou Province.

In the coming two days, most parts of Guizhou Province will suffer further icy rain, the National Meteorological Center forecasts.

Speculation may also be contributing to the increase in Moutai prices, with a bottle of Moutai produced in 1958 selling for over 1.45 million yuan at an auction in Hangzhou on Sept. 14 last year, said Yang Jianhua, a researcher with the Social Science Academy of Zhejiang Province.

With few investment options, many private Chinese investors are speculating on the price of goods such as tea, wine, gold, china and liquor.

Those who really drink Moutai liquor are usually not the buyers. Those who buy the liquor regardless of the cost often do not drink it, Yang said.

Flying Moutai is the classic Moutai product favored by Chinese consumers as festival gifts and given to parents, bosses, friends and relatives. The prices of other Moutai products have been comparatively steady, Gong said.

The 53 degrees Flying Moutai earned its cachet as "China's national liquor" because it is the white spirit Chinese leaders and diplomats offer to visiting dignitaries.

Late Chinese Premier Zhou Enlai toasted then U.S. President Richard Nixon with Moutai when Nixon visited China in 1972. The visit paved the way for the normalization of relations between the two nations.

The liquor was also served in 1984 after U.K. Prime Minister Margaret Thatcher signed the agreement that returned Hong Kong to China in July 1997.

Kweichow Moutai announced on Thursday at its suppliers conference it had sales revenue of over 15 billion yuan in 2010, beating its original target of 13 billion yuan in sales.

Despite the good business, Kweichow Moutai's stock opened 0.36 percent lower at 173.68 yuan per share Tuesday.

Spring Festival is a time when Chinese families members gather together, just like Christmas in the West. This year the festival falls on Feb. 3.

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