High-end liquor sees small rebound

Wholesale prices of high-end liquor such as Kwei­chow Moutai saw a slight rise recently, following an earlier dramatic decline mainly caused by the central government's curb on extravagant consumption by officials using public money, media reported Monday.

The wholesale price of Kweichow Moutai jumped 30 to 50 yuan ($4.89 to $8.15) per bottle to around 950 yuan, a source was quoted by the China Business News as saying. In January, wholesale prices of Flying Moutai with an alcohol content of 53 percent had dropped below 900 yuan from over 1,400 yuan.

Wholesale prices of Wuliangye have also seen a slight rise in some regions, said the report.

The newspaper quoted an insider as saying that the recent jump in wholesale prices was mainly caused by liquor companies limiting supply so as to avoid further price declines.

If the wholesale Wuliangye price drops below 660 yuan a bottle, the company will require distributors to buy back the liquor from retailers to reduce supply in the market, a source said.

Analysts also predicted that liquor companies would launch some mid-range products in the future given that the demand for high-end liquor is expected to remain weak amid a slowing economy and the government's ongoing curb on extravagant consumption.

Jiangsu Yanghe Brewery Joint-Stock Co said earlier this year that it will focus on mass consumption.

Yanghe will also launch a mid-range liquor priced between 300 and 400 yuan.

Analysts predicted that profits of mid-range and low-end liquors will be squeezed due to increasing competition from high-end brands, which are modifying their product lines. And an industry reshuffle is likely in the future.