Why Is Kweichow Moutai So Expensive?

Why Is Moutai So Expensive?

Let us analyze the reasons why Kweichow Moutai baijiu is so expensive.

There are a number of factors that effect the price of Maotai, in this article we will highlight the main events and the history that are primarily responsible for lending to the aura, mystique and romance created around the Maotai baijiu brand.

Maotai is more than just a spirit in China. Maotai is a part publicly traded and part state-owned company, and is the world’s most valuable liquor brand by market valuation.

Reason number one why Kweichow Maotai is so expensive: The perception of Maotai is everything.

In reality, Maotai’s flavour is not that drastically different from any other sauce aroma baijiu brand. It’s not necessarily the taste bud tantalizing properties of Maotai that create such a stir. It’s more the perspective of prestige. To gift a bottle of Maotai, whether as a token of esteem of an act of gentle conviction (some might say a 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 intentional marketing perception of aura, wonder and mystery surrounding the Maotai brand. In addition, there is the favouritism for this baijiu brand displayed by the Chinese Communist Party. Maotai is the spirit served at all state banquets, ensuring that it retains the official seal of approval of China’s ruling classes.

David Liu, an analyst and regular baijiu drinker based in Shanghai is quoted as saying. “Maotai is considered as a status symbol because of the high price and limited supply, which I believe it is part of Maotai’s marketing and sales strategy,”.

Reason number two why Kweichow Moutai is so expensive: How the Maotai brand rose to prominence!

Maotai 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 Maotai. Perhaps that was because it was the tipple of choice of Zhou Enlai, the Chinese premier and Mao’s second-in-command.

Either way, Maotai 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, “I think if we drink enough Maotai, we can solve anything.”

The production process of Maotai was modernized in the 1950s. Chairman Mao dispatched emissaries to the USA to learn modern distillation techniques and spirit production 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 Maotai began in earnest.

Maotai distillery is state-owned and operated. This means that every yuan earned through Maotai sales puts money back into the central coffers of the nation. Let’s not forget, Maotai is a publicly traded company on the stock exchange and is the most valuable liquor brand in the world, so sales of Maotai at high prices leave China in a healthy financial position. This does not leave the authorities with any real motivation to drop the price of Maotai. After all, the popularity of the product ensures that it will sell anyway, so why not charge a premium and reap the rewards for the state.

Reason number three why Kweichow Maotai is so expensive: Maotai regularly creates an image of rarity and scarcity to keep prices inflated.

Maotai also maintains its reputation as a premium product by remaining unreachable to the masses. That isn’t just because of the price, though this obviously factors into the issue for some low-earning Chinese nationals. Maotai is often produced in smaller batches, designed to create an air of scarcity and collectability.

Mr Wu Dewang, the brand manager of Maotai, was quoted as saying, “Our target is to go from our current 48,000-tonne yearly production to 56,000 tonnes. 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.”

If that sounds a little elitist to you … well, it probably is. To quote another source at the Maotai distillery. “Maotai has always been a drink for the powerful and wealthy. It has never been meant for ordinary people.”

Reason number four why Kweichow Moutai is so expensive: The marketing of Maotai as an investment.

By promoting this sense of scarcity, Maotai has become a collectible item in China. So much so, in fact, that the spirit is often used as an investment vehicle. Just like fine wine, an aged bottle of Maotai can be worth substantial sums of money. Recently, a bottle that dated back to the 1940s sold for 200,000 UK pounds, a sum that was considered disappointing by auctioneers. Previously, a 1935 vintage of Lay Mau Maotai sold for 1.2 million UK pounds.

It’s at auctions that you’ll often find vintage Maotai for sale, and not just in China. Christie’s auctioneers have a web page dedicated to Maotai auctions, such is the popularity and collectability of this liquor. The price of this product will only rise in time, so even a substantial outlay can yield great reward in the future. As Maotai is often released in limited edition bottles and packaging, there will always be a wealthy enthusiast seeking a particular label or year to add to their collection.

Reason number five why Kweichow Maotai is so expensive: Maotai IS as Chinese as China itself!

It’s not unusual for a particular drink to be intrinsically tied to a country and its culture. Think of Guinness, and your mind will invariably wander to the rolling hills of Ireland. The same applies with Maotai and China. This spirit and its homeland belong together and shall never be parted.

This also explains why Maotai retails at such a high price. There is undeniably a quality to the product, but there’s far more to it that creates a market value. Branding is power, and the effort that has been poured into marketing Maotai ensures that it remains the undisputed powerhouse among the biggest baijiu brands in the world.

Final Thoughts! Just because you’re the biggest does not mean you’re the best…

As was recently proven by an antiques dealer from England after discovering a 300-year-old imperial baijiu recipe created by one of China’s greatest ever emperors, the Emperor Kangxi, who ruled the country between 1662-1722.

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.

Moutai Scientific Analysis – VS – V.I.P Jiu 8 Scientific Analysis

Sample A and sample B
Sample A and sample B

A bottle of V.I.P Jiu 8 together with a bottle of Kweichow Moutai Flying Fairy was sent to a UK laboratory for analysis.

The laboratory is a registered member of UKAS – The United Kingdom Accreditation Service that is recognised by the UK government when comparing products to internationally agreed standards.

The two bottles were labelled sample A and sample B.

  • Sample A – V.I.P Jiu 8.
  • Sample B – Kweichow Moutai Flying Fairy.

The laboratory concluded that the two bottles were very different, with sample A (VIP Jiu 8) being considerably more complex than sample B (Kweichow Moutai Flying Fairy).

The laboratory concluded that the two bottles were very different, with sample A (VIP Jiu 8) being considerably more complex than sample B (Kweichow Moutai Flying Fairy).

The chart below clearly shows that sample A (VIP Jiu 8) contains many more compounds with positive attributes than sample B (Kweichow Moutai Flying Fairy).

The chart below clearly shows that sample A (VIP Jiu 8) contains many more compounds with positive attributes than sample B (Kweichow Moutai Flying Fairy).

Here are just a few of the many compounds known for their positive qualities found in V.I.P Jiu 8.

  • Alpha-Pinene and beta-Pinene – a wide range of pharmacological attributes have been reported, including anticoagulant, antitumour, antimicrobial, antimalarial, antioxidant and anti-inflammatory properties.
  • Beta-Myrcene – has a role as an anti-inflammatory agent and an anabolic agent.
  • Alpha-Terpinene – a known antioxidant.
  • Gamma-Terpinene – displays antimicrobial properties against various human pathogens.
  • Alpha-Terpinolene – produces a mildly sedative effect and can help reduce anxiety.
  • Alpha copaene – anti-proliferative, antioxidant.
  • Linalool – known to have anti-anxiety, analgesic and anti-inflammatory properties.
  • Trans alpha-Bergamotene – effective against inflammation in the intestine.
  • Beta-selinene – exhibits anti-inflammatory and antioxidant properties. These benefits may reduce the frequency and severity of painful gout attacks.
  • Beta Ocimene – known to work well with other terpenes and has anti-inflammatory, antifungal, antiviral and antibacterial properties.

Further Reading – (Kweichow Moutai – VS – V.I.P Jiu 8)