Kweichow Moutai Co plans to raise the price of its liquor by an average of 13 percent starting Jan 1 because the cost of raw materials increased, the company said in a statement issued Dec 7.
The wholesale price for 53% (V/V) is to rise more than 60 yuan ($8.78) to about 563 yuan per bottle. The wholesale price is usually 300 yuan lower than the retail price.
Kweichow Moutai has been expanding its productivity by 2,000 tons every year since 2005. Because all its products must be cellared for five years, the increased productivity will turn into revenues starting next year. The company's productivity, which was 4,000 to 5,000 tons in 2001, is to hit 20,000 tons this year.
National alcohol production increased 25.8 percent in October and the annual output totaled 5.5 million tons by October, up 24 percent over the same period last year.
An analyst with Shenyin & Wanguo Securities told cnstock.com that alcohol sales are likely to surge in coming months on rising consumption driven by a recovering economy and the narrowing decline of the consumer price index.
Kweichow Moutai's advances payment from customers indicate a rise in sales for the fourth quarter of this year over a year ago, cnstock.com said.
However, tight supervision on drunk driving could deal a heavy blow to sales of middle and high-end alcoholic beverages, as wealthy alcohol drinkers may change their drinking habits, Yan Yalei, a Bohai Securities analyst, told cnstock.com.>
