Maotai Bubble is Back, But Competitors Are Striking

21st Century: 一线调查：53度飞天茅台价高缺货 五粮液、泸州老窖补位进攻
Sogou: First-line investigation: 53-degree Feitian Maotai with high price out of stock Wuliangye and Luzhou Laojiao's replacement attack

For two consecutive months, according to the on-the-spot investigation conducted by 21st century business herald reporters from Beijing and Chongqing, not only are there no 53-degree Feitian Maotai sold in the self-run Maotai shops in the two places, but they are out of stock for more than one month, and even many Maotai dealers say they have no goods to sell. Many tobacco hotels and Maotai dealers in Yubei District of Chongqing reported that the 53-degree Feitian Maotai liquor was priced at around 1900 yuan, and department stores such as Beijing Cuiwei Department Store Peony Garden even priced at over 2400 yuan.

At a time when the price of Feitian Maotai liquor is high and out of stock, the market space vacated by Feitian Maotai liquor is being replaced by other famous liquors, the most prominent of which are Wuliangye and Luzhou Laojiao, which are closely followed by Feitian Maotai liquor.

While speaking, a phone call for wine came in. The shopkeeper answered, "Maotai liquor is expensive. if you drink it yourself, I recommend you to buy Wuliangye, a collection limit for the high-end department of Wuliangye. The original price is more than 2,000, and we have received gifts from large manufacturers, so we will give you 1100 yuan. The quality of the wine is much better than that of ordinary Wuliangye, and it is 1.5 kg and has high cost performance. "

After taking Wuliangye discounted high-end collection liquor PK Feitian Maotai, the other party was moved. The shopkeeper went on to lobby: "You think Feitian Maotai is expensive, take Maotai series? Maotai series wine is also of high cost performance, but are you good enough to entertain guests at a price of over 200 yuan and 300 yuan or 400 yuan? "

The words sound just fell and the other party immediately said at the other end of the phone that they would send a "Guoyun Chang" to us sometime. After finishing this large order, the shopkeeper turned to persuade the reporter who hesitated between Maotai and Wuliangye to buy the wine. Seeing that the reporter was not in a hurry to place the order, he quickly sent the picture of Wuliangye wine to the reporter's mobile phone and turned out the Wuliangye picture album, pointing out that the wine and the yudingjingsheng series that Wuliangye sugar will appear this spring are both ultra-high-end products, allowing the reporter to find him at any time.

Compared with the "shortage" of ordinary Maotai liquor, the ultra-high-end products developed by Guizhou Maotai are not out of stock.

"30-year maotai liquor is 9,700 yuan, and kg maotai is 3,800 yuan. these are all sold today." At Chongqing Ran Jia Ba Yu Song Zhi Lu Dian Wu Liang Ye Ming Hotel, the owner took stock of the May 7 delivery note and told reporters in 21st century business herald.

Similarly, at the self-run store of Chongqing Guojiu Maotai Sales Co., Ltd. located in Longshan Street, Yubei District, Chongqing, the clerk told the 21st century business herald reporter who bought the liquor as a consumer that although both Feitian Maotai of 53 degrees and 500 milliliters worth 1499 yuan and Wuxing Maotai of 53 degrees and 500 milliliters worth 1699 yuan were out of stock, the fine Maotai liquor was temporarily available at 3199 yuan.

The first quarter of this year showed that the net profit of Guizhou Maotai (600519.SH) increased by nearly 10 points over the increase in revenue. From January to March, the company realized operating income of 21.6 billion yuan, up 24% year-on-year, and net profit of 11.2 billion yuan, up 32% year-on-year. Pacific Securities believes that Guizhou Maotai's first-quarter results exceeded expectations, with product upgrades being the main reason. During the reporting period, the actual quantity of Maotai liquor shipped was close to 7,000 tons, the product structure and the price per ton of liquor increased, and the fine Maotai liquor was released at the end of last year. Judging from Guizhou Maotai's 2018 annual report, gross profit margin is as high as 91.25%, up 1.4% year on year.

Fine Maotai is becoming the new profit growth engine of Guizhou Maotai. At the national spring sugar cocktail party in March, no matter the first low-alcohol maotai dealer symposium or the maotai spring dealer symposium, many dealers took the initiative to talk about the market share of the fine maotai at the price of 3,000 yuan being expanded. Maotai ultra-high-end products, represented by premium Maotai, personalized Maotai and aged Maotai, are changing the strong market pattern dominated by 53-degree Feitian Maotai.

Returning to the shortage of ordinary maotai liquor, is it natural or artificial?

Under the marketing system in which the sales income of distributors and wholesale agents accounts for 95% of the overall sales income of Guizhou Maotai, the market price of 53 degrees and 500 milliliters Feitian Maotai has reached about 2,000 yuan. Self-owned or direct-selling stores supply a small amount of Feitian Maotai at 1499 prices. Will they not wait for customers to come to their homes and immediately become another drive-up by neighboring cigarette hotels or dealers?

Parity Maotai disappeared, leaving most Maotai dealers unscathed. However, for the consumers who are getting closer to Guizhou Maotai in the past two years, it has become a worry that they can't buy a bottle of Maotai in their own stores or run straight stores. "I am the manufacturer who issued the Maofen passport. As a result, I can't even drink the Maotai liquor with the manufacturer's guiding price of 1499, which will affect our loyalty to the product for a long time!" An anonymous Maofen in Chongqing called a reporter from 21st century business herald and said.

ChiNext Plunges 6.9% Early, Then Bounces; Shanghai Dips Too, But Now Higher

ChiNext was down 6.9% early on, to a low of 2717, but has bounced to a 5% loss. At the low, it was down 31% from the peak. Have to see how this plays out, the early drop is a good sign that like last Tuesday, it was pent up selling. The ChiNext is recovering its losses now. Shanghai suffered a similar dip and is already back to gains.

And the booze: Luzhou Laojiao is limit up 10%. Wuliangye and Maotai also beating the market.

Court Case To Decide Ownership of Ancient Baijiu Pits Tests Legal Reforms

The Sichuan high court has agreed to hear the case of the Yin family, who are suing Wuliangye (the name means 5 grain liquor) for seizing 16 baijiu pits. Baijiu has been fermented continuously since the Ming Dynasty in some of these pits. Bottles of liquor made in these pits sell for hundreds of dollars more than even the high-end spirits.

This case was considered dead about 5 years ago, but the high court has revived it. It is a test case for legal reform that aims to reduce abuses by local courts.

“The ultimate goal should be the restoration of judicial legitimacy.”

NC: What are the biggest problems with China’s judiciary, and how will these be addressed?

Chen Weidong: One major highlight of the legal reform [agenda] is to curb the external influence of local authorities over the court system. One primary problem with China’s judiciary is that court administration is highly localized. According to the Constitution, judicial power rests solely with the central government. But in reality, as local courts are locally funded and staffed, they are subject to [localized] political influence. The result is that local courts often do not serve the people, but local governments, and often make rulings based not in law, but in political expediency.

This is what the new round of legal reforms unveiled during the Third Plenum aims to tackle. In the future, courts at the county level will be funded by provincial governments, with provincial courts funded by the central government, freeing both from the influence of local interests.

In June 2010, Yin Xiaogong, speaking for the descendants of the Yin clan, accused Wuliangye and the local government of taking their private property. The local Yibin county court refused to hear the case. Wuliangye is a large company in Sichuan, let along the Yibin county where it is located. The court tossed a scalding hot potato by passing on the case. There's no evidence of corruption in this case, but the local court's refusal to hear the case raised suspicions. The family is suing for ￥300 million yuan.

Southern Metropolis Daily covered the case in 2010. 南都：五粮液明代酒窖产权之争. The family has documents showing a lease agreement with Wuliangye in 1952 and a government document from 1984 showing their property rights.

The pits were built during the 14th Century in the early Ming Dynasty, making them over 600 years old.

The SMD article is very detailed. Another article covering the details of the case is here: 五粮液600年酒窖产权之争始末：酒窖已遭破坏

Economic Observer looks at the legal reform angle:

The so-called judicial localized long, long time, human, financial, and material resources of the judiciary from the executive control and management at all levels: local courts rely on funding local government supply; staffing decision by the local government; place each improve working conditions level court, updating equipment, and local governments rely on the approval of relevant departments. This situation led to the judiciary in the application of the law of sentencing susceptible to interference or potential threat to the local government. The consequence is the loss of the local levels of the Court as a national judiciary should be neutrality, but rather as the protection of local interests and the interests of justice sector tools, courts in some countries has become "the place of the court."

In February, the comments against the people's court. "April" outline for the reform of the Supreme Court issued proposed to highlight the central powers attribute jurisdiction; and the requirements for court reform, the establishment of an appropriate system of separate jurisdictions and administrative divisions to ensure that people's courts exercise judicial power independently and impartially according to law reform initiatives also directed the two "local justice" of the drawbacks.

Now it seems that these reform measures proposed for the localization of Justice are from a small part of the operability start filing the registration system is one of them. May 1 start of the full implementation of the national court filing registration system, at the same time the Supreme Court, the official also stressed that shall be established in the prosecution of filing the registration conditions, to raise the threshold to initiate or engage in artificially controlled, engage internal local policies.

Wuliangye ancient pits the subject of more than 300 million yuan case case involves numerous, complex facts, both historical origins, the decision will have a significant impact on society, it has become the focus of media attention. For the Sichuan Higher People's Court and the relevant judge is certainly a challenge, but more importantly, the awful years of "dead case" can be placed on file, and finally independent judgment by the court according to the law, it is the credibility of the current judicial reform and justice a test, its impact is certainly more than the aged wine Wuliangye long.

EO: 五粮液古窖案是司法“去地方化”的试金石

Video （中文） after the jump.

Wuliangye Cuts Prices as Baijiu Bubble Keeps Deflating

China's anti-corruption campaign put the hurt on luxury baijiu brands. Wuliangye is still cutting prices in an attempt to grab market share——prices at the high end are coming down 30% and wholesale prices are back to levels seen 3 years ago.

五粮液多款产品降价抢市场

Cape V. prices fall, it seems only Wuliangye (000858.SZ) a start price behavior. Recently, Wuliangye to large distributors Silver Base Group (00886.HK) "relaxation", lowered 45 degrees and 68 degrees Wuliangye liquor supply price.

"First Financial Daily" correspondent was informed that this is the recent series of Wuliangye liquor "relaxation" of a signal. A series of anonymity, told reporters yesterday wine distributors, wine blessing recently to celebrate another series of doors also reduce the supply price, "high-end product prices lowered by 30%."

Chengdu Shangshan Brand Management Consulting Co., iron plows, chief strategic adviser, said the price adjustment and price adjustment before the S & P five is the same strain: "With the S & P five series of wine price adjustment is the trend, including the underwriting of products will be adjusted before the estimated not For a silver-based behavior. "For the price adjustment, the reporter yesterday asked Wuliangye relevant person in charge, but the other side has not yet responded to the deadline.

Wholesale price night back 3 years ago

Recently, Silver Base Group announced that, Yibin Wuliangye liquor sales company, and a wholly-owned subsidiary of Silver Base Trading and Development (Shenzhen) entered into a supplemental agreement, the company of 45 degrees and 68 degrees Wuliangye liquor supply price will be reduced to September 2011 price before the company believes will have a positive impact on margin improvement. It is understood that the current market price of 45 degrees Wuliangye between 500 to 600 yuan, 68 degrees Wuliangye prices below $ 700.

Although Silver Base Group did not disclose the specific amplitude adjusted, but industry insiders believe the move will help Silver Base Group reduced losses. Wine marketing experts 晋育峰 "First Financial Daily" reporters, said:. "Currently silver-based provision 999 million yuan for two consecutive years, the existing inventory 796 million yuan, is expected next year to reduce costs after a relatively favorable" Although This news release late, but still Silver Base Group will help reduce inventory costs and reduce losses. As Wuliangye big business, has been doing high-end liquor Silver Base Group caught under the limit "Three consumption" loss, the huge loss of HK $ 1.134 billion in 2013, 2014 continues to incur losses, losses amounted to HK $ 788 million.

In fact, in addition to these two exclusive agent by the silver-based Wuliangye products, the reporter learned from other sources, Wuliangye series of wine products also recently adjusted prices. "In recent days it lowered the supply prices," the dealer said above blessing celebrate the door, "high-end product supply price reduced by 30%, we are satisfied with the price." Previously, crystal bottle 52 degrees Wuliangye The price cut is 16.46%.

There are brokers who declined to be named to the "First Financial Daily" correspondent said that this is mainly because the main brand Wuliangye price from 729 yuan five P dropped to 609 yuan, the wine itself is a reference to the original series of the price system, therefore had to be adjusted. If the series of wine prices significantly higher than the S & P five, their performance will be poor, this adjustment should be to drop the price of the S & P after five, "the end of the upside is the ultimate goal."

Control the amount insured has changed abandoned trick

In fact, as early as last Friday on Wuliangye "spoilers" a series of wine will take action. Wuliangye aspects of the exchange after the shareholders' meeting with investors when it admits: "Competition has a new series of wine changes, the high-end wine prices down, the price squeeze on family liquor Wuliangye series of wine are also under pressure, with the real estate wine to be. indisputable share. "Thus," in the second half to strengthen the focus of the market breakthrough series of wine, resources have been arranged. strive series of wine there are no major decline. "

Wuliangye case revealed the flagship product of the same date, "the company to take measures to restore market order to get good prices have stabilized and rebounded terminal performance in the off-season is within the expected range."

Notably, when specifically mentioned in the second half to begin to grab market. Wuliangye side said: "This year, stocks are kept relatively low state marketing system do not give businesses yahuo hope businesses have annual sales of around 10% to 20% of the inventory.." Wuliangye Group chairman Tang Bridge admits: "The problem is not the price enterprises have the final say again, this will be reflected in the current round of adjustment. "

"Maotai, Wuliangye to ensure that the price of 2,000 yuan, the market shrinking, slowly we'll probably forget this brand, then what is the value of the brand? So, to expand your market share, the price is determined by the market." Don Bridge said.

Chinese Doctors Protest, Liquor Profits Cut in Half

China doctors protest after murder by patient

Chinese hospital staff protested on Monday after a patient killed one doctor and wounded two more, local media said, in the latest violence to hit the country's overburdened medical sector.

Dozens of doctors and nurses wearing white coats and blue surgical masks crowded outside their workplace in Wenling, in the eastern province of Zhejiang, photos posted on the major web portal Tencent showed.

Chinese Austerity Measures Hit Wine and Spirits Sales

Recently, baijiu sales have plummeted. In 2011, the average bottle of Moutai cost more than $323, and aged Moutais from the 1980s sold for $5,000 per bottle. In early 2012, the prices began dropping and now hover at around $164. Admittedly, it's been boom and bust. Just seven years ago, the same average bottle of Moutai was sold for $33 before prices shot skyward.

I haven't seen any English news with details, but Wuliangye, a competitor with Moutai, saw it's profits plunge in the third quarter. Profit was basically cut in half from a year ago. 五粮液三季报净利润大降 白酒板块难言拐点到来

I covered the liquor bubble previously, including: Chinese Maotai bubble bursts! and Maotai bubble continues to burst, but Maotai stock hits a new high. Maotai and Wuliangye are now well off their highs. That second post was written as Maotai was making its all-time high. Since then these stocks are down more than 40 and 50%, respectively.