Has Kweichow Moutai's Market Shifted?

The price of Kweichow Moutai's flagship product, Feitian Moutai, has officially fallen below a key psychological threshold in the market.

On December 12, data from a third-party liquor price monitoring platform showed that the wholesale reference prices for both loose bottles and original cases of 2025 Feitian Moutai (53% vol/500ml) dropped below the official guidance price of 1,499 yuan, settling at 1,485 yuan and 1,495 yuan per bottle, respectively.

At the beginning of this year, Feitian Moutai was still trading around 2,200 yuan per bottle. However, by June, it had successively fallen below 2,000 yuan and 1,900 yuan. In July, it dipped under 1,800 yuan, and by late October, it slid below 1,700 yuan. By the end of November, it had breached the 1,600 yuan mark.

**From "Warning" to "Fire"** Earlier, e-commerce platforms like Pinduoduo had already listed Feitian Moutai at 1,399 yuan per bottle. However, since the primary consumption of baijiu still occurs offline, the impact was limited. Now, with mainstream offline prices falling below 1,499 yuan, the symbolic and practical repercussions far exceed the temporary, localized effects seen on e-commerce platforms.

To draw an analogy, the low prices on e-commerce platforms were more like a "warning" from the market, while the collapse of offline prices represents the "fire" itself. The former tests Moutai's marketing strategies, while the latter directly challenges the resilience of its brand value and business model in the current environment.

For Feitian Moutai, 1,499 yuan is a critical psychological benchmark—not just as an official guidance price but also as an anchor for the entire baijiu market. For instance, consumers who purchased Feitian Moutai in 2024 at 2,300–2,400 yuan per bottle now face a steep devaluation, as the 2025 batch trades below 1,499 yuan. Older stock can only command a premium of 50–100 yuan, pushing transaction prices to around 1,600 yuan—a clear blow to last year's buyers.

The key question now is whether the breach of the 1,499 yuan mark will trigger a chain reaction. Typically, prolonged price declines erode distributors' profits, forcing them to sell at a loss to maintain cash flow, which could spiral into a vicious cycle of further price drops.

However, industry opinions are divided. Some insiders argue that Kweichow Moutai still has tools at its disposal. With a sales expense ratio of just 3.5% in the first three quarters of this year—far lower than peers like Wuliangye (10.8%), Luzhou Laojiao (10.5%), Yanghe Brewery (18.8%), and Shanxi Xinghuacun Fen Wine (10%)—Moutai has a thicker profit cushion to weather the storm. It could fine-tune expenses or delay collections to support channels without compromising its fundamentals.

By the end of Q3, Kweichow Moutai's contract liabilities had dropped 22% year-on-year. Management previously noted that market stability measures included reducing supply from June to August, easing pressure on distributors.

Yet, some distributors remain skeptical about the effectiveness of such support policies, citing weak demand as the core issue.

**The Bottom May Not Be In** Fundamentally, prices reflect supply and demand. While adjusting supply and supporting distributors addresses the supply side, weak demand remains Moutai's central challenge.

Premium baijiu like Moutai has long thrived on a core consumption logic: buying to profit from price appreciation. This financial and collectible attribute underpinned its price resilience. However, such "consumption" doesn’t involve actual drinking—it merely shifts storage locations, inflating social inventory.

When prices rise, this isn’t problematic, as buyers are willing to pay higher prices. But once prices fall—especially below official guidance—this inventory becomes a liability, exposing distributors to losses and cash flow strains.

Analysts suggest Moutai must pivot from being an investment or gift item to a genuine consumption product, focusing on real demand rather than channel stockpiling. However, transitioning to a mass-consumption brand requires overcoming hurdles like bridging consumer gaps, reshaping usage scenarios, deflating price bubbles, and rebranding—a daunting process.

Notably, Moutai's price may still have further to fall. At a November 28 shareholders' meeting, Kweichow Moutai's new chairman, Chen Hua, warned that the baijiu industry's downturn could persist, with no quick recovery in sight.

Reports indicate that on December 10, Kweichow Moutai held a market conference, announcing measures like canceling most distribution plans (including non-standard products), lifting price controls, and allowing offline clients to sell online.

In the first three quarters of 2025, Kweichow Moutai reported revenue of 130.9 billion yuan, up 6.32% year-on-year, and net profit of 64.6 billion yuan, up 6.25%—both growth rates hitting lows since 2015. Q3 revenue rose just 0.35% to 39.8 billion yuan (a 2016 low), while net profit edged up 0.48% to 19.2 billion yuan (a 2015 low).

Achieving its initial 9% annual growth target now appears increasingly challenging.