Kweichow Moutai Co undergoes strategy U-turn

08 May, 2019
Kweichow Moutai Co

The shift is designed to boost margins, but is also a way of cleaning up the distribution network, the people said.

One of the consequences has been a spike in prices in the retail market as distributors hoard inventory on concern they’ll

be terminated next, according to people involved in the sales network who didn’t want to be identified. A 500ml (16.9 oz) bottle of Feitian on Chinese e-commerce platform T-mall, currently costs in excess of 2,000 yuan, more than double Moutai’s factory-gate price set in late 2017 - the last time it was increased.

In an interview with Bloomberg in late 2017, Yuan detailed his strategy for pushing Moutai forward. He also planned to set up insurance and asset management businesses and was weighing public listings of Moutai’s e-commerce platform, an agricultural unit and the subsidiary selling Xijiu by 2020.

Those plans haven’t been mentioned by Moutai since Yuan was replaced almost a year ago. His removal from Guizhou province’s political consultative body this week, according to state-run media, could be another sign Yuan’s legacy is being unwound.

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