Moutai Posts Worst Growth in Years as Chinese Cut Back on Liquor
(Bloomberg) -Kweichow Moutai Co., China’s best distiller struggles with the weak consumer demand for premium beverages, and has enabled the worst-month growth in sales or profit over the years.
According to Tuesday, the first semi -income increased by 9.2% compared to the previous year to 91.09 billion Yuan ($ 12.7 billion), while the net revenue increased by 8.9% to 45.4 billion Yuan. According to data compiled by Bloomberg, these are at least the slowest six -month increases since 2016.
Distillation, which aims to increase sales for the year in a way of 9%, is the wholesale price of the flagship liquid Liquor Feitian – alcohol retailers of Moutai distributors – consumers continue to slip in the midst of economic uncertainty in China and even reaches a record decline. According to Bloomberg Intelligence Analyst Ada Li, wholesale prices for Feitian 2024 in original packages and Feitian 2025 decreased by 16% to 17%.
In May, the Chinese government has issued a notification to the authorities to reduce extravagant expenditures in the field of travel, food and office in May with a more blow to the prices of liquor. The bitch squeezing driving may further risk tanning for liquor in government feasts and corporate activities. In the local media, the company even changed its signature liquor at a buffet during the Month of Shares Meeting.
According to a local media report, in order to address falling prices, Moutii distributors in some provinces have accepted supply restrictions on channels, including e-commerce platforms.
Nevertheless, Moutai’s earnings were largely preserved from the volatility of wholesale prices, as they sell the query -based liquor known as Baijiu to distributors at a fixed price of 1,169 yuan per 500 millilitere bottle. Smaller Baijiu producers were more exposed.
According to a preliminary earning report, Sichuan Swellfun Co.’s profit fell by 57% and sales fell by 13% in the first half. Jiugui Liquor Co. warned that the first half net income decreased by at least 90% and income by 43%.
Bloomberg Intelligence’s LI, “Baijiu’da a strong recoil, a new anti-anti-active rules, compulsory and strict inventory controls, demand and wholesale prices, and who decreases wholesale prices,” he said. Nevertheless, thanks to the more adaptable manufacturers and already reduced government demand, the latest arcity squeezing pressure could be less severe than a pressure in 2012.
Moutai shares are under pressure due to wholesale price weakness. The stock fell 5.7% this year compared to a 5.3% gain in the Shanghai Shenzhen CSI 300 index. An index of liquor manufacturers listed in China fell by 8.8% this year.
-Help from Foster Wong.
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