![]() Moutai investor Dan Bin, chairman of Shenzhen Oriental Harbor Investment Co., estimates it’s probably around 7 percent. How much of the company’s output is sold to government buyers remains a mystery. ![]() Special supplies are never seen in public, as none of the liquor is made available to general retailers. They also show off warehoused boxes labeled “special supply,” packed with bottles reserved for big-name buyers.Ĭases of the best liquor are set aside, for example, for the Great Hall of the People in Beijing, members of the Chinese People’s Political Consultative Conference (CPPCC), the military’s Central Guard Bureau, the navy’s North Sea Fleet, the Chengdu Military Command, telecom giant China Mobile, and the utility China Southern Power Grid. Samples of every type of Moutai liquor-including those collected by connoisseurs-are proudly displayed in an exhibition hall at the company’s distillery in Renhuai.ĭistillery tour guides describe for visitors the company’s “important role” in national politics, diplomacy and the economy. So far, though, it’s had little success, and critics have been crowing louder. It’s also come out with new products aimed at widening the brand’s public appeal. The company has tried to boost direct sales and get around a dealer network which includes many high-level officials. But there’s no guarantee retail sales will offset a slowdown for bulk deals. If government agencies, the military and state-run companies indeed buy less liquor in the future, as Wen suggested, more of Moutai’s best brands may be available for public consumption at full prices. The business restricts the amount of expensive Moutai available for sale at full retail prices, pinching the company’s profit potential. ![]() Moreover, major sales channels are controlled by influential government and business officials with the power to fix prices. The next day, market capitalization worth 14 billion yuan evaporated as Moutai’s stock price fell to 201 yuan from 215 yuan per share.Ĭritics of Moutai’s business model say too many top-of-the-line bottles of its liquor are sold in bulk at discount prices to buyers affiliated with the state, which also happens to be the company’s majority owner. Speaking at the State Council’s Fifth Clean Governance conference, Wen proposed “prohibiting the use of public funds to buy cigarettes, high-end liquor and gifts.” Those fears were fanned March 26 when Premier Wen Jiaobao suggested the government slash its liquor budget. In the eyes of many minority investors, Moutai is too reliant on discounted sales to government-backed clients. The company reported net profits rose 73 percent last year from 2010 to 8.8 billion yuan, while operating revenues climbed 58 percent to 18.4 billion yuan. State-controlled, Shanghai-listed and Renhuai, Guizhou province-based Moutai has long capitalized on its status as a traditional favorite in China for toasts, business dinners and after-hours imbibing. Some say Moutai as a company may be a lot weaker than its baijiu. Its unusual dealer network and a possible slowdown for government liquor spending are raising red flags as well. This price gap is contributing to growing investor concern about the company. Ltd., costs only 619 yuan-less than one-third the retail price. They also like Feitian Moutai because a single bottle, thanks to special arrangements between state agencies and distiller Kweichow Moutai Co. Moutai is best served chilled, on the rocks or straight.A glass of Feitian Moutai packs a wallop, which is one reason why the 106-proof baijiu is a hit among influential government officials. Usually several grades of Moutai are blended into a single brew before being put on the market. The whole process lasts about one year, after which the liquor aged for several years. If it is not up to the standard, it will be distilled again and again until it is. Then it is kept for half a year and tasted. The raw materials are boiled seven times and condensed nine times without addition of any water to create a more purified and aromatic liquor. The raw materials should be processed before the ninth day of the ninth Chinese lunar month and the processing is completed in ten and a half months. Its production technique is complicated and seasonal, like that of field crops. Moutai is made of sorghum and wheat, half and half mixed, fermented eight times and distilled seven times. Moutai liquor was first made over 800 years ago and by the 18th century Moutai had already been regarded as "the best liquor in Guizhou". Moutai liquor is famous for its sustained aroma and mellow taste, it has a special flavor and unique aroma that's mellow and sweet, with a lingering flavor and an odor that clings to the cup Moutai Liquor Whiskey from Kweichow Town - China's National Liquor - 53% v/v 500ml
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