Kweichow Moutai Co. will increase prices for its signature drinks for the first time in six years as the Chinese liquor giant seeks to claw back profits from distributors on its highly sought-after spirits. Shares surged.
The Chinese state-owned distiller announced late Tuesday an average 20% factory-gate price hike for its signature 53% vol baiju products, the sorghum-based liquor of choice for banquets among government officials and businessmen in the country. Moutai shares jumped 9.8% at the mainland open.
The increase, effective Wednesday, came amid repeated calls for such a move by investors and is largely on par with the 18% hike the company announced six years ago that brought its ex-factory price to 969 yuan ($132). Retail prices for the liquor will remain the same, the company said, adding the change will have “some impact” on earnings.
While the most valuable Chinese spirits maker has been an investor darling and the drink of choice among the country’s elite and middle class due to its scarcity and special flavor, it’s rare for Moutai to raise prices considering China’s regulators and state media have pressed it to stabilize market prices and refrain from taking excessive profits.
(Updates with share move.)
