Caixin
Jun 14, 2012 03:04 PM

To Battle Counterfeits, Kweichow Moutai Reveals Supply Figures

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(Beijing) – Producer of China's most expensive liquor made public its expected annual supply for 2012 in an effort to combat counterfeits.

Kweichow Moutai Co. Ltd. said on its website June 12 that dealers will receive 19,800 tons of Moutai, which would be about half of the company's output if 2011 production figures are considered. Roughly half of the company's annual production goes to what are known as "special supply" channels and its direct retail stores.

With retail prices as high as 1,200 yuan per bottle, Moutai is one of the favorites of China's counterfeiters. In 2010, the nationwide consumption of Moutai was 10 times the total output in 2009, meaning 90 percent of the liquor in the market was faked, said Chen Youtai, a researcher at the Commerce Bureau of Guizhou Province, where the company is based. 

The recent announcement is the first time the company has publicly announced its supply to dealers. Listed in Shanghai, Moutai is one of the largest state-owned enterprises (SOEs) in Guizhou.

Critics of Moutai's business model say too many of its top-of-the-line bottles are sold in bulk at discount prices to buyers affiliated with the state. Moreover, critics say, major sales channels are controlled by influential government and business officials with the power to fix prices.

The "special supply" goes to places including the Great Hall of the People in Beijing; the Chinese People's Political Consultative Conference; the military's Central Security Bureau, which guards senior leaders; the navy's North Sea Fleet; the Chengdu Military Command; and some major SOEs, such as telecom giants China Mobile and major utility China Southern Power Grid.

 

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