China’s top alcohol brand Kweichow Moutai signed Saturday [14 October 2017] a Memorandum of Understanding (MoU) with a visiting San Francisco government delegation in a bid to promote bilateral cooperation in trade, investment, culture and tourism. Under the MoU, Moutai will open an office in San Francisco to increase its sales in the city and further expand its market share in the United States, said Yuan Renguo, chairman of Kweichow Maotai Group…Full Article Xinhua Oct 2017

Key Point

  • In November 2015, Kweichow Moutai celebrated the 100th anniversary of its first gold medal at the Panama Pacific International Exposition in San Francisco. The mayor of San Francisco subsequently dubbed the date (November 12th) San Francisco Moutai Day.

ChinaAg Comments

  • In May 2017, Kweichow Moutai (SHA:600519) announced it would establish a joint venture with Xiuzheng Pharmaceutical Group (TCM company based in Jilin Province) to produce and market health tonic liquor. Health tonic liquor is a liqueur that has been infused with herbs or animal products. It is often consumed as a form of Traditional Chinese Medicine (TCM).
  • In 2016, according to a market report by Xiuzheng Pharmaceutical Group, Jing Brand Co Ltd had a 40% share of China’s health tonic liquor market. At the same time, Kweichow Moutai had a market share of under 10%. By 2020, the report forecasted that China’s health tonic liquor market will reach CNY 44 billion [~USD 6.5 billion] in value.
  • In December 2016, Xiuzheng Pharmaceutical Group (Changchun, Jilin Province) announced plans to invest CNY 1 billion [~US$143.8 million] in their Guizhou business unit over the next five years.
  • In July 2016, Kweichow Moutai (liquor producer) saw its share price increase to its highest level (CNY 317.19 or US$47.41) since the company started trading on Shanghai Stock Exchange in 2001. As of 8 March 2017, its share price had increased to CNY 367.25 (US$53.17).
  • In March 2016, Tan Dinghua was placed under investigation by law enforcement authorities for “serious violations of party discipline” (i.e. corruption). A year earlier, in February 2015, Tan Dinghua had retired as Vice General manager of Moutai.
  • In January 2016, e-commerce liquor retailer VipShop was found selling fake Moutai liquor. As a result, Vipshop stated it would suspend its liquor sales, including Moutai (~CNY 1,000 or US$150 per bottle).
  • In 2015, the price for a 500ml bottle of Moutai 53-degree liquor (the company’s primary product) dropped to CNY 1,000 (~US$161) per 500ml bottle, while in 2012 a Kweichow Moutai 53-degree bottle sold for CNY 2,000 (~US$316).
  • In December 2015, a liquor counterfeiter was sentenced to 5 years in prison in Guangxi Region. The counterfeiter re-filled high-end liquor bottle brands with cheaper alcohol and primarily distributed them in Beihai City, Guangxi region.
  • In October 2015, Kweichow Moutai announced in Moscow that it would begin supplying the Russian market, focusing on Russia’s wealthy and high-end consumers.
  • In August 2014, Kweichow Moutai announced forming a joint venture with Yonghui Superstores and Shenzhen Guomaoyuan Commerce and Trade Co Ltd. Through the JV, Moutai would sell its liquor in Yonghui supermarkets. The profit breakdown would be 60% for Moutai and 20% each for Yonghui and Shenzhen Guomaoyuan.
  • In February 2013, China’s NDRC (National Development and Reform Commission) fined Kweichow Moutai CNY 247 million (US$39.5 million) due to price fixing.
  • In January 2013, the NDRC and Price Bureau in Guizhou Province investigated Kweichow Moutai in accordance with China’s 2008 Anti-monopoly law. Moutai was forcing distributors to sell at high price.
  • In 2005, Kweichow Moutai launched its heath tonic liquor division.
  • Established in 1999 in Guizhou province (southwestern China), Kweichow Moutai (SHA:600519) is a state-owned enterprise in China, specializing in the production and sales of Maotai liquor, together with the production and sale of beverage, food and packaging material, and development of anti-counterfeiting technology.

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