Chinese liquor giant Kweichow Moutai recently announced a price hike, effective July 18, for its 53% ABV 500ml Feitian Moutai on the iMoutai platform. The retail price has been raised by 100 yuan to 1,639 yuan per bottle, with the corresponding channel sales contract price also increasing by 100 yuan to 1,369 yuan. This marks the second price increase for Feitian Moutai this year, following a previous adjustment at the end of March. Within just over three months, the channel contract price has accumulated a rise of 200 yuan, while the official retail price has increased by a total of 140 yuan.
Notably, these consecutive price increases are occurring against a backdrop of overall industry weakness. According to a mid-year report from the China Alcoholic Drinks Association and KPMG, the output of liquor companies above a designated size fell by 1.7% year-on-year in the first quarter of 2026. Furthermore, both revenue and net profit for the 20 A-share listed liquor companies declined. Currently, the core operational strategies for most liquor enterprises involve controlling shipments to clear inventory and offering promotions to stabilize prices. The pricing systems for mid-range to high-end and regional liquor brands are generally under pressure.
With the entire industry facing a downturn, why is Kweichow Moutai Co.,Ltd. bucking the trend with consecutive price increases? The most direct driver is to advance market-based pricing reform and gradually regain control over pricing power.
For a long time, Feitian Moutai has operated with three distinct pricing systems: the contract price for distributors, the retail price on official self-operated platforms, and the wholesale price formed spontaneously in the circulation market. In the past, the official guidance price was significantly lower than the market transaction price. This large spread created a substantial gap, leading to widespread hoarding and reselling activities. Real consumer demand became mixed with speculative demand, with the majority of the premium being captured by the circulation channels.
With this latest price adjustment, the iMoutai retail price of 1,639 yuan is now very close to the current market wholesale price of 1,650-1,660 yuan. By aligning the official price more closely with the market price, Moutai is first reducing the arbitrage opportunities for scalpers and middlemen. This makes buyers on the official platform more likely to be genuine consumers, helping to boost the actual consumption rate. At the same time, the synchronized increase in the channel contract price means that a portion of the profit previously retained by the distribution system is now flowing back to the producer. Data shows that in 2025, Kweichow Moutai Co.,Ltd.'s direct sales revenue surpassed its wholesale and agency revenue for the first time, with the direct sales channel boasting significantly higher gross margins. The ongoing strategy of raising contract prices and expanding direct sales is essentially an effort to optimize the company's profit structure through pricing system reform.
However, raising prices against the industry trend is not without its challenges. On one hand, the official retail price of 1,639 yuan serves as a test of real consumer demand. If the market wholesale price subsequently falls below this official price, the price increase could end up weakening end-consumer purchasing power. On the other hand, in the first quarter of this year, Kweichow Moutai Co.,Ltd. saw a net decrease of 255 domestic distributors. As the company continues to squeeze channel margins, a key issue for the reform will be balancing the service value and profit interests of its distributors.
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