Why Moutai commands such a premium price?
There are a number of factors that affect the price of Moutai, below we will highlight the main events in history that are primarily responsible for lending to the aura, mystique and romance created around the Moutai baijiu brand.
Maotai or Moutai which it is also known, is more than just a spirit in China. Maotai is part publicly traded and part state-owned producer and is the world’s most valuable liquor brand by market valuation.
The perception of Moutai is everything
In reality, Moutai’s flavour is not drastically different from any other sauce aroma baijiu brand. It’s not necessarily the tastebud-tantalising properties of Moutai that create such a stir. It’s more the perspective of quality and prestige. To gift a bottle of Moutai, whether as a token of esteem of an act of gentle conviction (some might say soft bribe!) is to show a demeanour of wealth and taste.
In many respects, this is a triumph of marketing and reputation management. There is an aura of wonder and mystery that sounds Moutai. In addition, there is the favouritism for this baijiu brand displayed by the powers that be. This is the spirit served at all state banquets, ensuring that it retains the official seal of approval of China’s ruling classes.
How Moutai Rose to Prominence
Moutai is marketed as the national spirit of China (albeit not officially trademarked as such.) This really became the case in 1949, when Chairman Mao rose to prominence. Mao and his comrades toasted the founding of the People’s Republic of China with Moutai. Perhaps that was because it was the tipple of choice of Zhou Enlai, the Chinese premier and Mao’s second-in-command.
Either way, Moutai has been served and shared at all state banquets since the 1950s. Countless political leaders of all stripes from around the world – including Richard Nixon and Kim Il Sung – have enjoyed this famously potent spirit. US Secretary of State Henry Kissinger was a particular fan, announcing at a peace summit in 1972 that, “I think if we drink enough Maotai, we can solve anything.”
The production process of Moutai was modernised in the 1950s. Chairman Mao dispatched emissaries to the USA to learn how traditional spirits were made in the west. Bringing these learnings home to China, three distilleries – producing a trio of different baijiu brands, Ronghe, Hengxing and Moutai – were merged. An iconic brand was forged from the ashes, and the ascent of Moutai began in earnest.
This distillery is state-owned and operated, too. This means that every yuan earned through Moutai sales puts money back into the central coffers of the nation. When we also consider that Moutai is publicly traded on the stock exchange – and is the most valuable liquor brand in the world – sales at high prices can leave China in a healthy financial position. This does not leave the authorities with any real motivation to drop the price of Moutai. After all, the popularity of the product ensures that it will sell anyway. Why not charge a premium and reap the rewards foir the state?
Moutai baijiu – the blend created, bottled and sold by Kweichow Moutai Co, Ltd in the town of the same name – has long been considered China’s national liquor. So much so, in fact, that you’d be forgiven for assuming that this was an official designation. In truth, this not the case. An attempt to apply a trademark to this effect has been rejected.
Such a status is decided, controlled and ultimately bestowed by China’s Trademark Office of the State Administration for Industry and Commerce (SIAC). Since 2001, Kweichow Moutai Co, Ltd have been launching attempts to trademark their product with appropriately grand registration. Ten attempts have been launched and roundly rejected on each instance. Now, it appears, that the manufactures have accepted their fate.
The consumption of alcohol is a way of life in China. Referred to as, “ganbei culture”, people are encouraged to drink heartily and regularly at social occasions – especially when enjoying baijiu. Unfortunately for one police officer in Mabu Village, part of the Jiangxi Province, there was a heavy price to pay for such decadence.
Chen was a 38-year-old officer of the law attending a party in Mabu. It is believed that Chen initially arrived at his destination on official business, but after concluding his workload, he began socialising with locals. This led to countless cries of, “ganbei!” – loosely translated, “bottoms up!”
If you have never heard of Maotai, you soon will. This baijiu is a pivotal drink in its native land. Let’s take a look at the key facts that surround this most reputable of spirits.
There is no denying Moutai is an incredibly great baijiu.
Moutai is ingrained in Chinese culture, there is nothing more Chinese than Moutai other than the Chinese people themselves. In China Moutai is an institution in its own right, it is a premium luxury brand that oozes opulence. It is considered by many in China as an investment commodity as well as a huge gainer of face. Moutai is the biggest and wealthiest baijiu brand in the world.
Just because your the biggest does not mean your the best…
Kweichow Moutai has annual sales of approximately $10.61 billion USD with an output reach of about 70,200 tons. Kweichow Moutai has a reputation for being the most premium and expensive baijiu brand on the market, in comparison with its competitors. Moutai boasts a market share of 56% amongst premium baijiu brands. 91% of the company’s business is derived from sales by distributors, with the remainder derived from direct sales. Kweichow Moutai is the most well-known and popular of the high-end baijiu brands in China.
So given the sheer size and financial clout of Kweichow Moutai how can any baijiu brand compete with this corporate monster? The short answer is they can’t. No baijiu brand can match Kweichow Moutai’s brands awareness in China and their huge marketing budget.
RONG TAI HE (RTH), the Original Maotai since 1879 and forerunner to Kweichow Moutai started from 1952, unsurprisingly won Double Gold at this year’s International Spirits Challenge (ISC), a highly respected and much anticipated event in international spirits’ annual calendar. Not only did RTH win a long overdue recognition, after receiving Gold at 1915 Panama-Pacific International Exposition, it definitively excelled other baijius, including world renowned brand, from China too.
When we think of Yorkshire, baijiu is hardly the first beverage that springs to mind. Most of us would picture a Yorkshire resident enjoying a chilled pint of bitter, or a steaming mug of strong tea. Stereotypes are made to be broken, though – especially by Baijiu Society, a brewery based in Rydale.
Baijiu Society are bringing a fresh spin to China’s national liqueur, aiming to bring it to mainstream attention throughout the UK and beyond. Business is already booming thanks to exports to China and Hong Kong, where company CEO Craig Butler was formerly based.
It is no exaggeration to say that the price of a relatively scarce bottle of an old baijiu is comparable to that of a decent size house.
For example, the estimated value can be up to 3 million yuan for a 50 year old bottle of Maotai. Whether buying baijiu to start a collection or to be consumed in the future it will require correct storage no matter if its for one, three or ten years. Only good quality baijiu will stand the test of time. In terms of flavor, the sauce flavor is the first choice for long term storage, which is the reason why a bottle of Feitian Maotai is difficult to find. Other aroma types are classified according to the actual situation. Experienced senior collectors say: If baijiu is stored for 3-5 years then sauce aroma baijiu is preferred, followed by strong aroma baijiu and thirdly is light aroma baijiu.
Baijiu producers in mainland China have started producing bottles of high strength alcohol to be used in the medical industry to help fight against the current Wuhan coronavirus.
The Wei He factory located in Linqing city in China’s Shandong province recalled their work force back from their Chinese new year holiday to start immediate production and withing days had produced 1000,000 bottles of 75% alcohol to be donated as quickly as possible to medical staff across China.
Llinqing city’s front line staff battling against the virus were given the first batch on Wednesday.
The 109-year-old granny in the Chinese countryside likes to drink baijiu daily. She received 10 bottles during the Spring Festival.
The old woman’s name is Cheng Fengying. The old woman said that her nominal age is 109 this year. Older rural people like to report their ages like this. In fact, she is really 108 years old. She has no children and all her life and has lived in the countryside. She drinks 2 cups of baijiu every morning, goes to the village to chat at noon and sometimes plays mahjong. She is not deaf, blind and is healthy. She is a blessed person and has caught up with the new era.
The old woman said that when she was in her 80’s her husband died, leaving half a bottle of Baijiu. She felt a little bored at home one day, so she wanted to taste the Baijiu. Initially she didn’t think it tasted good. Over the next few days she drank a few more mouthfuls and eventually became addicted to it. She has drank it now for nearly 30 years, and is now 108 years old.