Maotai price increase survey: from 300 to 1,000 yuan, who is the real promoter

In just three years, from 300 yuan to more than 1,000 yuan, manufacturers, distributors, competitors, investors, who is the real promoter of Maotai prices?

July 2010, 868 yuan.

August, 898 yuan.

In September, 958 yuan.

In December, 1,280 yuan.

In the past few months, the terminal price of 53° Maotai, which is the benchmark for Maotai price, has changed almost every month. According to the survey, the price of Maotai terminal rose from 300 yuan to 1,000 yuan, but spent only about 3 years, or a little less than the property market.

On December 15, 2010, Kweichow Moutai finally issued an announcement stating that "to better balance the interests of all parties involved in the country, consumers, businesses, distributors, and investors," as of January 1, 2011 "Appropriately" raised the ex-factory price of products by an average of 20%.

At this time, in some domestic terminal markets, the price of 53° Feitian Maotai was nearly 50% higher than that at the beginning of 2010. Combined with this announcement, the terminal price is expected to be nearly 1,500 yuan in 2011—unprecedented.

Behind this madness, who is driving Maotai prices? "Business" reporters visited many places and repeatedly went to Maotai to try to restore their real motives.

Manufacturers are "starters"

It is no coincidence that the Maotai factory was detained with a hat that was a "starter".

In July 2010, it was the off-season traditional sales of the liquor industry. The news that “Moutai has increased its price” in several media outlets was just like a stone that sparked a wave of waves. According to reports, Beijing Maotai Store, 53° flying Maotai has risen to 869 yuan, and in a retail terminal in Chongqing, 53 ° flying Maotai retail price is a historic break through the thousand yuan mark, and both "supply, a bottle Hard to find." The next thing is getting worse. The price of Moutai terminals across the country has been surging ahead.

From the timing of price increases over the years, Maotai’s price increase in the off-season was surprising. When the “Business” reporter asked Moutai related persons, they all expressed that “the ex-factory price has not changed” and “it is not clear what the terminal situation is. After the investigation, it can be concluded”.

The industry is known as the "second line to see the line, the first line to see Maotai," said, led by one body and move the body, Moutai ex-factory price increase is not frequent. The last time in December 2009, the 53° flying Maotai factory price increased from 439 yuan per bottle to 499 yuan - it was this move that set off a wave of rising prices in the liquor industry in early 2010. In order to stabilize the market, Maotai also issued a "limit order" - the price of 53 ° flying Maotai terminal must not exceed 730 yuan. Yuan Renguo, general manager of Maotai, made it even clearer that if dealers arbitrarily increase their prices, they will even be disqualified.

The smoke seems to have just dispelled. Why did the news of "Moutai prices rise" appear after just six months?

"Cost increase" has always been a shield for the price increase of various brands of liquor. A Moutai dealer in Harbin City told reporters that due to the impact of inflation, the price of raw wine and auxiliary materials in 2010 rose by more than 30%. Moreover, the consumption tax started to be collected in liquor in early 2010, which is also one of the factors causing cost increase.

However, for companies such as Maotai, whose gross profit margin is as high as 90.2% in 2009, can the cost increase justify itself? The production of a kilogram of Maotai needs 2.4 kg of sorghum and 2.6 kg of wheat. According to the current market price, the total price of 5 pounds of grain does not exceed 6 yuan – just as a liquor industry veteran says, high-end liquor brands have high added value. "Even if the cost rises by 100%, it will have no effect on the market sales price."

It is untenable to take the cost, and the “Expo Exclusive” is recognized by some dealers and specialty stores in Guangdong. "The 2008 Olympic Games, this year's World Expo and the Asian Games, entertainment and business use of alcohol increased significantly, the market's conventional supply space is small."

In this limited conventional supply space, the chief culprit of price increases seems to be the “manufacturer to control goods”.

The data shows that in the case of normal sales in previous years, the volume of Moutai’s missing goods was also around 30%, and the peak period was often out of stock, so that shortage of goods became a direct driver of price increases. A Beijing-based Carrefour supermarket staff told reporters, “After some out-of-stock vendors came to us to scan the goods, we were forced to raise prices.” A supermarket in Guangzhou has been out of stock for nearly two months in mid-July 2010. Although the target price is 868 yuan, the staff members made it clear that once the arrival, 53 degrees Maotai will definitely break the thousand yuan mark. A Maotai first-level distributor also showed the reporter the registration form for the time of stock-out. The number of registrations was arranged in a number of pages. "The last time there were four, one six bottles, and it was sold out in less than two hours."

Since the market is in short supply, why are the manufacturers controlling the goods? A maotai dealer, who declined to be named, said that “Moutai has deliberately created a shortage of supply in order to ensure that the price rises year by year” and “now Maotai’s way of increasing prices is out of stock, allowing distributors to increase prices first, and then increase the ex-factory price after accepting them. The situation that caused price increases is also out of stock." This is the so-called "hunger marketing" in the liquor industry.

For a time, Maotai manufacturers were pushed to the cusp and were criticized.

Deliberately, the Moutai bargaining problem is that the dealers complained about the Maotai factory's "control quantity insured price," and the chairman of Moutai Group Ji Keliang pointed to the real reason for this round of price hikes "should ask dealers."

First, the shortage of supply is the objective reality faced by Maotai manufacturers. The brewing characteristics of Maotai-flavor liquor determined that the production capacity of Maotai could not be increased geometrically. After several expansions, the estimated production capacity of Maotai manufacturers in 2010 was only 26,000 tons. At the same time, since the product cycle lasted for five years, the Maotai wine in 2010 was actually the base wine produced five years ago. In 2006, the production capacity of Moutai was only over 10,000 tons, of which about 70% would be blended. For sale, the remaining part of the "old wine" should be used for future blending.

In this way, the actual production of Moutai in 2010 is already very poor, but the market demand is several times or even dozens of times the supply!

Secondly, from the standpoint of Maotai manufacturers, deliberately creating "supply in short supply" is indeed more in line with their own interests.

Some dealers told reporters that 60% of real Moutai should be provided to troops, 20% to the Guizhou Provincial Government and state banquets, and more than 2,000 tons to the market. In May 2009, some domestic distributors tried to make up Moutai’s shipments, and they had to go to Moutai town to “forge a house”. As a result, “Moutai sales company still answered like toothpaste, and waited for it” — this kind of statement Of course it was not confirmed by the Maotai factory.

However, the direct result of demand shortage is price increase. As early as the beginning of 2009, the financial crisis was devastated and the sales of Maotai fell, and even a number of dealers lowered their prices. Maotai immediately reduced its dealer quotas, with a maximum limit of 50%. "Order control" came out, Maotai price crisis immediately reversed - "control quantity insured" has become an important means of Maotai manufacturers ordered terminal.

And Maotai has the ambition to "grow up." Chinese consumers' perception of the value of high-end liquor is mainly reflected in the price, and it seems that “the more expensive the more valuable”. Therefore, in recent years, in the competition for high-end liquor, it is necessary to crack down on the gap between hand-in-hand and to increase the brand, which is bound to increase prices. This is not only reflected in Maotai and Wuliangye competing to raise prices in the past 20 years. Maotai has even greater ambitions in the battle for liquor leadership.

Yuan Renguo, general manager of Maotai, once said that Maotai should be built into a “luxury product”. The implication is that in the future, Maotai sells not wine but identity. After all, at home, XO and Louis XIII can sell for thousands of dollars. Maotai aims at these high-end wines.

What's more, in terms of long-term interests, in 2010, 53° Maotiantai ex-factory price of 499 yuan, this wine is stored for 10 years is 15 years of vintage, and in 2010, Maotai 15 years old wine ex-factory price is 2599 yuan. According to Maotai's ex-factory price increase of nearly 20% in recent years, conservative assumptions 10 years later, Maotai 15 year old wine ex-factory price only doubled, which is 5198 yuan, that is to say, 2010 Maotai storage 10 years later The ex-factory price is 10.4 times the 2010 ex-factory price - the compound annual rate of return is as high as 26.4%. In contrast, it is clear that the stock of Chen wine is more in line with the long-term interests of Maotai.

From the production and sales ratio of 134.1% in 2005 to 57.3% in 2009, the production and sales ratio of Maotai decreased year by year. This also reflects Maotai’s transformation in its development strategy. In the future, the sales of ordinary Maotai wine may still dominate, but the sales revenue of aged wine will increase significantly. Produce and store, wait for opportunity to sell - this is the "control" strategic significance.

From the most realistic interests appeal, to the brand to enhance the appeal, and then to the strategic appeal, Maotai “control quantity insured” starting point is understandable. In actual operation, Maotai has been controlling rhythm well in recent years and has never incurred such a big criticism.

Where does the problem lie?

The real estate speculation is not as good as Maotai. Maotai has realized that the terminal price is extremely crazy. In mid-September 2010, Maotai issued another “Limit Order”, stating that the maximum price of Feitian Maotai at 53° is 869 yuan, which exceeds the price and is an arbitrary price increase. To this end, Maotai formulated stricter penalties and even sent eight teams to conduct investigations across the country.

From the results, this move clearly has little effect. After July 2010, the 53° flying Maotai label on the terminal market was changed almost every month, with 898 yuan and 958 yuan..