Under the New Alcohol Ban, Will Moutai's Financial Attributes Diminish?

Over the past weekend, the price of Moutai liquor continued to decline. Public data shows that the wholesale price of the 2025 Feitian Moutai original box was RMB 1,945 per bottle on June 21 and fell to RMB 1,935 per bottle on June 22—a two-day drop of RMB 15. As of June 22, the wholesale price for single bottles had decreased to RMB 1,870 per bottle. In contrast, prices at Moutai specialty stores remained relatively stable.

Since May 18, both the price of Moutai liquor and its stock price have been falling in tandem. Within just one month, the wholesale prices of boxed and single-bottle 2025 Feitian Moutai slipped below RMB 2,000, while Moutai’s stock price declined by over 10% from recent highs. The newly introduced alcohol ban has been a key driver behind this trend. Against this backdrop, questions have emerged over whether the policy will erode Moutai’s longstanding financial attributes.

Initially, some regions adopted overly strict or sweeping interpretations of the alcohol ban. However, as the updated policy clarified the criteria for what constitutes “prohibited consumption,” its impact on the liquor and catering industries has moderated. This clarification has helped reduce excessive enforcement.

Regardless of the adjustments, one aspect remains consistent: any behavior that falls under the definition of “prohibited consumption” is not allowed. This suggests that the share of government-related consumption in the liquor industry will likely continue to decline.

In anticipation of reduced demand, some liquor companies have begun to provision for potential losses from a sharp drop in government consumption. The resulting decline in liquor stock prices reflects both expectations of slower revenue growth and market-driven emotional selling. In bearish conditions, such sentiment-driven selling tends to have a stronger effect on prices.
While the new ban imposes clearer restrictions, its actual impact on the liquor industry appears limited.

A similar policy was introduced in 2012, prompting liquor companies to diversify away from government clients. At that time, public-sector sales accounted for around 40% of total industry revenue. Today, that figure has dropped to below 5%. This shift demonstrates that even if such sales approach zero, the broader impact on liquor companies may be limited. Many firms have successfully pivoted to business banquets and consumer markets, bringing mid-to-high-end products into everyday life.

Within the industry, a longstanding view categorizes liquor firms into two groups: Moutai, and all others. Moutai’s strong financial characteristics have long created a unique moat around its business. Taking Feitian Moutai as an example, its pricing structure includes several layers: the ex-factory price, the suggested retail price, wholesale prices (for single bottles and original boxes), and the broader market price.

Although the wholesale prices for both boxed and single bottles have dropped below RMB 2,000 and are approaching RMB 1,900, they still exceed the suggested retail price by over RMB 400 and the ex-factory price by more than RMB 700.

This persistent price gap has reinforced Moutai’s financial attributes. In this system, wholesalers and resellers are often the primary beneficiaries. Consumers, unable to purchase Moutai at the official retail price of RMB 1,499, are forced to pay upwards of RMB 2,000, with the margin captured by intermediaries.

There is growing consensus that Moutai should return to its original positioning and become more accessible to general consumers at fair prices. Narrowing the gap between wholesale and retail prices could suppress speculative trading, boost direct sales, and preserve product quality while improving price transparency for consumers.

The recent price decline does not necessarily signal the end of Moutai’s financial attributes. Historically, there have been periods where market prices came close to the ex-factory price, yet the brand maintained both its financial characteristics and leading industry position. At present, the gap between the wholesale and ex-factory prices remains above RMB 700, and over RMB 400 against the suggested retail price. As this margin narrows, Moutai may introduce supply and price controls to stabilize the pricing system.

Kweichow Moutai’s ongoing share price decline reflects concerns about slower industry growth and changing supply-demand dynamics. To manage market expectations, Moutai and other liquor companies might consider strategies similar to Apple’s—such as stock buybacks or increased dividend payouts—to support valuation. Apple has maintained high valuations despite slowing earnings by returning substantial capital to shareholders through repurchases and dividends.