Recent market rumors suggest that the retail price of Guizhou’s Feitian Maotai has dropped below 2400 yuan, triggering consecutive days of stock price decline. On April 8th, it plummeted below 1700 yuan, marking a 2.8% decrease, with a market value evaporating over 60 billion yuan. On the 9th, accompanied by a wholesale price reduction, the stock price of Guizhou Maotai remained sluggish. Mainland liquor industry insiders point out that they haven’t seen Feitian Maotai prices drop so drastically in over a decade, attributing it not solely to the off-season factor.
According to these insiders, since 2012, the price of Feitian Maotai has been fluctuating upwards. A decrease of this magnitude is indeed rare. Normally, with each increase of about 200 yuan in the price of Feitian Maotai, there would be a slight decrease of 10 to 20 yuan, but never such a significant drop.
Various media reports indicate that the price of 53-degree/500ml Feitian Maotai liquor has plummeted. According to reports by China News Service, some liquor recyclers replied that Maotai liquor from different years has been continuously dropping in price recently, making it difficult to sell at the current rates. The stock price of Guizhou Feitian Maotai fell below the 1700 yuan mark on the 8th, causing a market value loss of over 60 billion yuan. (Visual China)
Since the beginning of 2022, the terminal market price of Feitian Maotai has been in a downward cycle, but the recent decline has been notably significant. China News Service quoted many recyclers as saying that this price drop of Maotai is unusual. “This time it’s a crash, not just because of the off-season. Either sell the liquor quickly or wait until Mid-Autumn Festival to see how the market fares.”
21st Century Business Herald reported that during peak seasons such as Mid-Autumn Festival, year-end, and Spring Festival, the wholesale and market prices of Feitian Maotai liquor generally rebound before the peak season. For example, this January, Maotai’s stock price dropped below 1600 yuan, but by the eve of the March annual report disclosure, it had approached 1745 yuan. “This kind of fluctuation reflects more on the cyclical sentiment of the market, contrasting sharply with Maotai’s stable performance.”
Interviewed by the media, Sun Shanshan, chief analyst of Huaxin Securities’ food and beverage sector, believes that “under the short-term high-frequency tracking of the market, any fluctuations will be captured and amplified, thereby triggering herd behavior and increasing panic.” Sun Shanshan stated that the decline is mainly due to the impact of the downward adjustment of Maotai’s batch price during the holiday period. It’s more about the market’s acknowledgment of the valuation repair of the liquor sector in the previous period. Continued upward movement requires more and stronger catalysts. “However, in the past two years, the frequency of this cyclical panic has been accelerating.”
Chinese liquor industry analyst Xiao Zhuqing stated that insufficient purchasing power is a common problem facing the Chinese liquor industry. Consumer expectations for future income are pessimistic, leading to consumption tightening and downgrading, which affects the performance of high-end liquor consumption under the broader economic environment.