Kweichow Moutai’s price increase was not enough to pull baijiu, a Chinese grain liquor, out of its slump.
As of market close on July 21, Kweichow Moutai’s share price had fallen to RMB 1,308 (USD 193) per share. Wind’s Baijiu Index also dropped 1.47% to 2,926.9.
Just one trading day earlier, the entire baijiu sector had opened higher and kept rising on the back of a price increase for Feitian Moutai. Gujing Distillery hit its daily limit, while several distillers, including Kweichow Moutai and Luzhou Laojiao, rose more than 5%.
Within a day, market sentiment cooled. After digesting the positive news from the price increase, investors began reassessing the structural problems facing the baijiu industry.
The price increase took effect on July 18.
Starting that day, the official retail price of Kweichow Moutai’s signature liquor, Feitian Moutai, was raised to RMB 1,639 (USD 241.8) per bottle from RMB 1,539 (USD 227.1) for the 2026 500-milliliter, 53% alcohol-by-volume variant. Its contract sales price was increased to RMB 1,369 (USD 202) per bottle from RMB 1,269 (USD 187.2).
At the end of March, Feitian Moutai’s retail price had only just risen by RMB 40 (USD 5.9) to RMB 1,539 per bottle, while its factory-gate price was lifted to RMB 1,269 from RMB 1,169 (USD 172.5). At the time, the company said the price increase was meant to stabilize the core price foundation and restore profit margins across the channel.
This time, Moutai said the adjustment was based on the principle of matching supply with demand and balancing volume with price, while following the market. In other words, Moutai wants its official price to move closer to the actual trading price in circulation.
According to a 36Kr check of Jinri Jiujia, the market price of Feitian Moutai was close to RMB 1,650 (USD 243.5) on July 17, when the latest price increase was announced. Although wholesale market prices almost always rise after each price hike, the room for speculative resellers to profit by flipping bottles is disappearing. That is exactly the result Moutai wants.
For more than three decades, the growth logic of the baijiu industry was blunt and straightforward: distillers only needed to win over distributors and push inventory into the channel to recognize revenue. But with supply and demand out of sync and retail sell-through stalling, the traditional distributor-led model has reached its limit.
In the first quarter of 2026, according to the China Alcoholic Drinks Association, the total value of systemwide inventory in the baijiu industry exceeded RMB 300 billion (USD 44.3 billion). Listed baijiu companies held more than RMB 170 billion (USD 25.1 billion) in inventory, while the industry’s average inventory turnover period reached 900 days.
Beverage alcohol analyst Xiao Zhuqing told 36Kr that, apart from a handful of top brands such as Feitian Moutai, channel inventory at sub-premium and regional distillers has generally been piling up for anywhere from six months to several years.
“Distributors lose money on every bottle they sell. Price inversion has become the norm,” Xiao said.
All of this has forced distillers to pursue a more market-oriented, consumer-facing transition and deal directly with consumers. The difference is that Moutai has the confidence to save itself.
In 2022, iMoutai officially launched, gradually shifting product pricing power back to the group from distributors. Financial data shows this shift more clearly.
In fiscal 2025, direct sales channels, including iMoutai, accounted for more than 50% of revenue, reaching RMB 84.54 billion (USD 12.5 billion) and surpassing wholesale distributor channels for the first time.
This marked a major shift in Kweichow Moutai’s sales structure.
Chairman Chen Hua previously set the tone, saying Moutai is using its marketing system to move from channel-driven sales to consumer-driven demand.
“We will dynamically monitor changes in market supply and demand, consumption trends, channel inventory, and end-market sell-through, and conduct scientific analysis and judgment based on differences across products and regions,” Chen said, referring to product prices. They “cannot rise or fall sharply.”
It is worth noting that following the market also means prices can be adjusted at any time. Xiao emphasized that Moutai prices will not only rise in the future.
According to iMoutai, the Moutai 1935 series will soon launch promotional campaigns.
Some products already underwent active price cuts in January. Kweichow Moutai Chiew (Jingpin) was reduced sharply to RMB 1,859 (USD 274.3) per bottle from RMB 2,969, (USD 438.1) while 15-year Moutai fell to RMB 3,409 (USD 503) from RMB 5,399 (USD 796.6). Moutai’s two-way pricing model, in which prices can rise or fall, has already taken shape.
At the same time, from a financial perspective, price increases for blockbuster products directly lift revenue.
A research report from SWS Research forecast that Moutai’s first price increase would add 2.5–3.0% to 2026 net profit, while the second increase would add about 0.5%. The report expects the company’s net profit attributable to shareholders to grow 4%, 10%, and 11% year-on-year from 2026 to 2028, respectively.
But the broader industry’s fundamentals are far less optimistic.
In the first half of 2026, among the eight listed baijiu companies that had disclosed earnings guidance, only Wuliangye forecast earnings growth, and even that was arguably a numbers game caused by a sharp reduction in the year-earlier comparison base.
In addition, Beijing-based Shunxin Agriculture expects net profit to fall 69–79% year-on-year. Gansu Huangtai Wine-Marketing Industry and Swellfun (Shuijingfang) are both expected to post losses.
Speaking with 36Kr, some analysts said they believe the current decline in baijiu earnings stems from long-term structural pressures across consumption, occasions, and channels.
“Baijiu consumers are aging, and young people do not have the habit of drinking baijiu. Consumption occasions that used to revolve around banquets and gift-giving are collapsing. The established distributor model is gradually losing effectiveness,” one analyst said.
In that person’s view, it will be difficult for the baijiu industry to return to growth at scale in the short term. Xiao added that “the channel inventory accumulated across the industry will take at least one to two years to clear. What determines a company’s value in the future will no longer be the size of distributor payments, but the real number of bottles opened and the repeat purchase rate.”
At Moutai’s shareholder meeting in June, management said past crossover projects, including the Moutai-flavored latte developed with Luckin Coffee and Moutai ice cream, did not fit the company’s long-term brand strategy.
There is sound logic to that. In the short term, younger consumers drawn in by the latte are unlikely to become buyers of Feitian Moutai. Rather than dilute the brand for traffic that may not convert, Moutai may be better served by focusing on high-net-worth consumers with stronger purchase intent.
The bigger question is whether that accessible market will keep shrinking as baijiu fades from the habits of a younger generation. Clearing inventory and making market-oriented adjustments are only the first step. Once they survive the downturn, all baijiu companies, including Moutai, will need to keep thinking about how to use effective product innovation to meet the real needs of the next generation of consumers. That will be the key to whether the entire industry can continue.
KrASIA features translated and adapted content that was originally published by 36Kr. This article was written by Xie Yunzi for 36Kr.
Note: RMB figures are converted to USD at rates of RMB 6.78 = USD 1 based on estimates as of July 22, 2026, unless otherwise stated. USD conversions are presented for ease of reference and may not fully match prevailing exchange rates.