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Moutai announces huge production increase for 2019

Moutai announces huge production increase for 2019

Kweichow Moutai has announced it plans to sell about 31,000 tonnes of China’s most famous spirit in 2019.

“The sales volume in 2019 will increase by 3000 tonnes more than in 2018,” said Li Baofang, chairman of Moutai Group.

According to Li a total of 17,000 tonnes of liquor will be supplied to distributors and the rest will be sold through e-commerce retail channels.

Kweichow Moutai expects to sell 7500 tonnes of liquor during the coming New Year and Chinese New Year period. It will release a special Year of the Pig edition after the New Year’s Day holiday.

Moutai has a colourful history and was served at the founding of the People’s Republic of China, in 1949.

During the famous 1972 summit between China and the United States, Chinese premier Zhou Enlai toasted President Richard Nixon with the liquor, with the US secretary of state, Henry Kissinger, reportedly announcing: “I think if we drink enough Moutai, we can solve anything.”

The liquor is in the enviable position of being so popular that demand invariably exceeds production. 

South China Morning Post Magazine noted in August: “Even visitors to the company headquarters are allowed to purchase just two bottles per ID card. The same restriction applies to buyers using the official website.”

“Our target is to go from our current 48,000-tonne yearly production to 56,000 tonnes,” brand manager Wu Dewang said. “It will be hard to go beyond that, because that could affect the eco­system and quality, and on those we will not compromise.

“We have to think about Maotai as a scarce resource.”

A senior company official, who asked to remain anony­mous, added: “People’s income has skyrocketed and we will never be able to match the rapidly increasing demand because Moutai is an affordable luxury and a very impor­tant piece of the social and business cultures of China.

“When I joined [Kweichow] Moutai, almost 20 years ago, sales were 900 million yuan. Last year, we recorded a record 76.4 billion and we expect to reach 90 billion in 2018.

“But we have put certain restrictions in place to reduce speculation and have a better control of supply. For example, we now forbid dealers from increasing prices and overstocking.”

However, angst over Chinese spending shaved $10 billion off Moutai stock in October, with the company postiung its slowest quarterly profit growth in almost three years.

Meanwhile, rival Wuliangye – which has a “co-operation agreement” with Brown-Forman – also showed signs of a slowdown, reporing a 20% growth in net income, its slowest growth since the fourth quarter of 2016.

“There are increasing concerns over China’s luxury market, especially amid the escalating trade war,” Qi He, a Shanghai-based fund manager at Huatai Pinebridge Fund Management Co, told Bloomberg. “There are too many uncertainties and it’s unknown how long trade tensions will last, so people are more reluctant to buy high-end goods.”

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