Moutai sales no longer soaring?

Often referred to as China’s “national liquor”, Moutai has seen its sky-high prices plunge down to earth in just six months, tumbling from its pedestal into a harsh winter.

Since the start of this year, the bellwether of China’s baijiu (Chinese liquor) market, Feitian Moutai, has repeatedly fallen to previously unimaginable lows. In June, the wholesale price for loose bottles of Feitian Moutai fell from 2,000 RMB per bottle (US$278) to 1,900 RMB and then to 1,800 RMB within just 15 days. By October, during the e-commerce promotion period for 11 November Singles’ Day pre-sales, the price for a bottle of Feitian Moutai dropped below 1,700 RMB for the first time.

According to data from third-party platform “Today’s Liquor Prices” (今日酒价), as of 10 December, the reference wholesale price for Feitian Moutai had fallen further to 1,500 RMB — another record low — just 1 RMB above the official guide price of 1,499 RMB.

On e-commerce platforms, Feitian Moutai has at times been even cheaper than the wholesale market price. For example, the “group-purchase” price on Pinduoduo once fell to 1,399 RMB per bottle, undercutting the official guide price.

At its peak, the retail price of new Feitian Moutai bottles once approached 3,000 RMB, roughly double the current level. Collectible aged bottles have fetched auction prices in the millions. In 2021, at a Sotheby’s auction in London, a case of 24 bottles of 1974 Kweichow Moutai Sunflower label sold for 1 million pounds, equivalent to about 9 million RMB at the time or nearly 380,000 RMB per bottle on average.

Moutai’s performance in the auction market has also declined. At the Kweichow Moutai special session of Poly Auction Spring Auctions 2024, nearly 92% of the 132 Moutai lots went unsold, with total sales amounting to less than 220,000 RMB. One attendee lamented that in just an hour, he had “personally witnessed the collapse of Moutai’s prices”.

When Moutai was still a hard-to-get item, there were scalpers who offered free trips for elderly people to fly from Maotai Airport to nearby cities such as Guiyang and Chengdu, in order to buy Moutai at airports. At that time, the market price of Moutai was 1,800 RMB, while the promotional price at airports was 1,499 RMB per bottle. Each person could buy six bottles on a round trip — after deducting roughly 500 RMB per person for air tickets and accommodation, scalpers could still earn more than 1,000 RMB per head when they resold the bottles.

This once “guaranteed profit investment” has since lost its shine to the point that even scalpers in the past couple of years are no longer interested. Chen Zhou, who works in baijiu buy-backs, told the “Leopard Change” (《豹变》）column of Chinese official media The Paper (《澎湃新闻》) that for Moutai he has taken in, “it hasn’t even been a week, and I’m already losing more than 100 RMB per bottle”.

In mid-November, a scalper dealing in Moutai told China Business Daily that some larger scalpers expect the price of Feitian Moutai to continue dropping and, fearing losses if they take on stock, have already notified contacts in their WeChat circles that they are suspending purchases.

As Moutai prices keep falling, even distributors are hard pressed to hold out. Recently, an online article surfaced claiming to be a confession from a “bankrupt Moutai distributor”. This person described himself as “a distributor who once staked his entire fortune and life on Moutai”, but who has now become “a ‘liar’ dumping stock at low prices on Pinduoduo”.

The “bankrupt Moutai distributor” said that after factoring in interest and storage, the cost of a batch of Moutai had exceeded 2,000 RMB per bottle. “In selling them at 1,499 RMB or 1,399 RMB, I’m losing several hundred RMB on each bottle, just for cashflow to stay afloat!”

The genesis of this confession could be traced back to how some Kweichow Moutai investors accused Moutai sold on e-commerce platforms as “counterfeit” while also branding distributors as “industry criminals who sell fakes”.

The “bankrupt Moutai distributor” retorted by saying that investors did not dare face the truth because they feared the market would discover that “Moutai is not a myth that only ever appreciates in value; it can also be slow to sell, there can be a bubble, and there are people eating ‘blood-soaked steamed buns’.”

Behind Feitian Moutai’s predicament lies the broader downturn in China’s baijiu market.

A “2025 China Baijiu Market Mid-term Research Report” released in June this year by KPMG and the China Alcoholic Drinks Association pointed out that only 21.1% of liquor companies reported an increase in customer numbers this year, and the shrinking baijiu consumer base has become a consensus view. With falling demand, output has naturally declined; it is estimated that this year China’s baijiu industry may see its eighth consecutive annual drop in production.

The biggest shock to the baijiu market this year came from a policy adjustment. The revised Regulations on Practicing Thrift and Opposing Waste in Party and Government Organs in May expanded the ban on alcohol from high-end spirits to all alcoholic beverages. This so-called toughest “drinking ban” in history explicitly prohibits alcohol at official receptions. Some reports suggest that local governments have introduced even stricter rules, such as forbidding gatherings of more than three public officials for meals.

KPMG and the China Alcoholic Drinks Association noted that, although government-related consumption now accounts for a significantly smaller share of the baijiu market, the policy’s impact on market sentiment must not be overlooked.

The policy has also accelerated structural changes in consumption patterns. Weddings, longevity banquets, and drinking at home have become the main occasions for baijiu, reducing the dominance of high-end products. In the first half of the year, the best-selling baijiu was priced between 300 RMB and 500 RMB.

The report noted that this has forced companies to adjust their product strategies. For example, the wholesale price of mid-to-high-end brands like Moutai 1935 has fallen to around 700 RMB. Despite sales rising against the broader market trend, the downward pressure on prices is set to continue.

Falling demand and prices have led to rising inventories for distributors and retailers, creating cash flow pressures and prompting greater caution in future purchasing. According to KPMG and the China Alcoholic Drinks Association, based on annual reports from 20 A-share listed baijiu companies, inventories reached 168.389 billion RMB last year, an increase of around 19.3 billion RMB.

Meanwhile, the younger generation is rejecting the “toasting culture” and find the strong, fiery taste of baijiu unappealing, pushing the industry into a so-called “midlife crisis”. According to the 2024 Youth Drinking Report by Houlang Research Institute last year, beer ranks first among young drinkers, while baijiu comes only fourth.

Amid these structural shifts in the market, China’s baijiu industry delivered what insiders have called its worst results in a decade in the third quarter this year. Of the 20 baijiu companies listed on the A-share market, only Kweichow Moutai and Shanxi Fenjiu posted slight growth, while the other 18 saw sharp declines. Even Wuliangye, another leading producer, recorded year-on-year drops of 52% in revenue and 66% in net profit in the third quarter.

To boost baijiu sales, the Guizhou provincial commerce department released on 9 December a draft set of ten measures to promote baijiu sales in Guizhou, seeking public comments.

The draft suggests expanding the nationwide sales of Guizhou baijiu through incentives such as consumption vouchers; promoting its entry into large chain supermarkets, and launching targeted promotional campaigns for concentrated spending scenarios such as weddings, birthday banquets, graduation celebrations, teacher appreciation banquets and corporate annual dinners.

It also calls for accelerating baijiu exports and supporting closer cooperation between producers and financial institutions, including exploring services such as “pledge loans for baijiu brands” and “baijiu income-right wealth management products”, in order to activate industry assets and ease companies’ funding pressures.

Cai Xuefei, a veteran analyst of the baijiu industry, told the National Business Daily that the draft sets out a systematic strategy combining short- and long-term measures, aimed at opening up new growth paths for the industry during a period of deep adjustment.

As it is only a draft for public comment, the final details have yet to be confirmed. Xiao Zhuqing, a seasoned industry insider, noted in particular that the effectiveness of the policy will depend on the provisions of implementation; otherwise, it may fall into the familiar trap of a “high-profile launch followed by poor execution”.

Also, baijiu producers are seeking to develop lower-alcohol varieties below the traditional 50% alcohol by volume with a smoother taste, in an effort to tap into the younger consumer market.

Policies take time to move from formulation to implementation, and then to tangible impact; the same applies to launching new products and opening up sales channels. Before Moutai can soar again, distributors and retailers must first weather the current winter.

This article was first published in Lianhe Zaobao as “茅台不再“飞天”？”.

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