Kweichow Moutai and Wuliangye Share Prices Rise Together, Leading Liquor Enterprises' New Round of Market-Oriented Policies Takes Effect

On March 16, the food and beverage sector, including Baijiu, continued to rise, with leading liquor companies such as Kweichow Moutai and Wuliangye leading the gains.

According to recent news, Moutai local associations have held meetings to clarify that non-standard Moutai will fully implement a consignment sales system; Wuliangye also held a large marketing meeting for brand operators and consultants.

It is reported that the core of the non-standard Moutai consignment system is full marketization. Specific measures include: the distillery retains ownership of the inventory; distributors pay a deposit to obtain sales rights; they sell at the official unified price and earn a 5% commission; and they are subject to the distillery’s assessment and supervision. The underlying logic of this marketization includes: 1) incentivizing channels with a “more work, more reward” approach to grow the market; 2) improving consumer service levels; 3) maintaining price stability.

Guotai Haitong Consumer Team analysts believe that the Baijiu industry has entered the bottom of this cycle, with signs of channel sentiment recovery. Marginal changes such as improved market conditions, rising wholesale prices, inventory reduction, and macro policies are strongly catalyzing stock prices.

Data shows that Kweichow Moutai is a constituent of the CSI Sub-Industry Food Index, which is also held by the Food and Beverage ETF (515170.SH). As of March 16, the ETF’s holdings in Kweichow Moutai accounted for 18%. Compared to pure liquor ETFs, the Food and Beverage ETF (515170.SH), which excludes tail-end distressed companies, focuses more on leading brands with strong market influence and significant marginal effects from reform, such as Kweichow Moutai and Wuliangye, which together account for over 60%. During the industry’s bottoming phase, investors can also participate through off-market fund regular investments, such as Huaxia Food and Beverage ETF Connect C: 013126 and Huaxia Food and Beverage ETF Connect A: 013125.

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