---
title: "Glass Bottle Prices Rise! Beer May Usher in a New Wave of Price Hikes"
description: "Recently, a price hike notice from a glass bottle manufacturer has stirred up the beer industry again. Due to environmental pressures, raw materials such as quartz sand, cullet, and cartons have risen by more than 50%, plus increased production costs, all glass bottle prices will increase by 6% from April 15. After the Spring Festival in 2018, several leading paper companies also announced price increases, with significant rises in cultural paper and packaging paper. According to incomplete statistics, 28 paper mills have announced price hikes since the Spring Festival. The entire first half of the year will adjust prices according to changes in raw material costs..."
author: "New Distribution"
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published: "2018-04-22"
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# Glass Bottle Prices Rise! Beer May Usher in a New Wave of Price Hikes

> Recently, a price hike notice from a glass bottle manufacturer has stirred up the beer industry again. Due to environmental pressures, raw materials such as quartz sand, cullet, and cartons have risen by more than 50%, plus increased production costs, all glass bottle prices will increase by 6% from April 15. After the Spring Festival in 2018, several leading paper companies also announced price increases, with significant rises in cultural paper and packaging paper. According to incomplete statistics, 28 paper mills have announced price hikes since the Spring Festival. The entire first half of the year will adjust prices according to changes in raw material costs...

Recently, a price hike notice from a glass bottle manufacturer has once again stirred up a wave of price increases in the beer industry, which had been relatively calm. According to the notice, due to environmental protection pressures, raw materials such as quartz sand, cullet, and cartons have risen by more than 50%, coupled with increased production costs, all glass bottle prices will increase by 6% starting April 15.
After the Spring Festival in 2018, several leading paper companies also announced price increases, with significant rises in cultural paper and packaging paper. According to incomplete statistics, 28 paper mills have announced price hikes since the Spring Festival. Prices will be adjusted throughout the first half of the year based on changes in raw material costs, and the raw material market will continue to see price increases.
Since the second half of 2016, seemingly in sync with the recovery of the liquor industry, prices of raw materials such as liquor packaging materials have gradually risen. By 2017, many liquor companies had raised prices for some products citing rising raw material costs.
However, unexpectedly, at the beginning of 2018, raw materials started another round of price increases. How does this round differ from the previous one? What impact will it have on baijiu companies and the industry? These are worth attention.
Since last September, due to strict environmental inspections, many small-scale packaging material factories have closed, leading to price increases for raw materials like glass, with some rising by more than 50%. According to incomplete statistics, glass prices have quadrupled in 2017!
**01**
**Multiple Factors Lead to Another Wave of Price Hikes**
On February 27, Yueyang Forest & Paper Sales Company issued three price hike notices in succession, with Yueyang Forest & Paper Co., Yuanjiang Paper, and Yongzhou Xiangjiang Paper all raising prices on all products immediately, with the highest increase reaching 800 yuan per ton for certain paper grades.
Pulp and paper producer Asia Symbol also announced a 200 yuan per ton increase on all branded copy paper and OEM brands starting March 1.
Quanlin Paper will increase prices by 200 yuan per ton on all branded cultural paper, specialty paper, and food packaging paper starting March 1.
Huajin Group will increase cultural paper prices by 200 yuan per ton starting March 1.
Chenming Paper announced that due to rising raw material and environmental costs, it will increase cultural paper prices by 200 yuan per ton from March 1. Notably, this is the second price increase in a month, following a 200 yuan per ton increase on cultural paper announced on February 1.
Nine Dragons Paper stated at its interim results conference on February 27 that after the Spring Festival, all its eight domestic bases have raised prices by 20% to 70%...
In response to this phenomenon, Guo Yaping, packaging paper analyst at Zhuochuang Information, said that since the Spring Festival, packaging paper prices have risen by an average of about 200 yuan per ton, and for large mills with strong bargaining power, another wave of increases is expected around March 5. Additionally, NOA-PRISM surveyed global trends and predicted that more and more countries and regions worldwide will implement paper price increases.
Regarding the reasons for this round of paper price increases, Zhao Xue, paper industry analyst at Shengyi She, said that on one hand, raw material prices have risen; on the other hand, it coincides with the school season, when demand for cultural paper is high. Both rising costs and strong demand have driven up paper prices.
Meanwhile, industry insiders revealed that in recent years, the concentration of international wood pulp supply has been increasing. Domestic hardwood pulp mainly comes from Brazil and Indonesia. Due to the increasing scarcity of timber, limited raw material supply has further enhanced suppliers' bargaining power.
**02**
**"Low-End" Liquor Companies Under Pressure Again; Industry Landscape May Change**
Facing rising raw material prices, some liquor industry insiders say that the impact on companies primarily producing mid-range and high-end liquor is minimal, but it mainly affects those "low-end" liquor companies.
The insider said: Companies that focus on low-end liquor, have limited management capabilities, and weak brand power can follow trends and make money in good times, but they are the first to fall when fluctuations and adjustments occur.
Other analysts point out that multiple increases in raw material prices pose challenges for national light bottle liquor companies. The analyst said: "At present, the price band for light bottle liquor is gradually rising, but the mainstream price remains low, with thin product profits and high sensitivity to raw material prices. This round of raw material price increases may prompt the upgrade of light bottle liquor companies, which is both a crisis and an opportunity."
In this regard, Tian Zhuopeng, founder of Beijing Zhuopeng Strategy Agency, analyzed: "At present, the era of high-line light bottles has arrived. The prices of mainstream liquor companies' light bottle products have gradually risen to 20 yuan, 30 yuan, 50 yuan, and some even exceed several hundred yuan. In the future, there is no upper limit for high-line light bottle prices. This raw material price increase is just one of the triggers for the high-line light bottle era; the real main reasons are consumption upgrade, younger consumers, and consumption diversity."
Tian Zhuopeng also said: In this round of raw material price increases, it is crucial for distilleries to seize the opportunity of consumption upgrade and raw material price hikes to adjust the prices of some low-end products in line with trends. This is also a major test for liquor companies.
"The continuous rise in raw material prices directly increases costs for low-end liquor and light bottle liquor, and indirectly raises operating costs in low-end baijiu distribution channels, forcing the transformation and upgrading of low-end liquor and light bottle liquor," said brand expert Xu Guangsheng. He analyzed: Price increases in liquor packaging materials directly lead to higher production costs. If a company's brand strength is insufficient and cannot support price increases, the resulting market chain reaction will directly affect normal operations.
Xu Guangsheng emphasized that rising raw material prices bring a clear "fire and ice" situation to the entire industry. For some mid-to-low-end liquor companies that have not yet formed brand advantages, it is like adding frost to snow, but for famous high-quality baijiu, they are beneficiaries in the price hike wave, and for high-end liquor companies, it is like adding flowers to brocade. "From an industry development perspective, this will also further drive and accelerate the transformation and upgrading of the entire industry."
03
**"Old Three Methods" Not a Cure; New Smart Solutions Needed**
In fact, last year, raw materials such as paper and glass, which are crucial to the baijiu industry, had already seen several rounds of price increases. Tangjiu Kuaixun reported on last year's increases in detail. In the previous raw material price increases, liquor companies generally adopted three methods to cope with cost pressures.
First, the price transfer method: spreading the increased costs to consumers by moderately raising product prices.
Second, the self-digestion method: striving to absorb the increased costs internally through "cost-cutting" measures.
Third, establishing long-term stable cooperative relationships with raw material suppliers to minimize the extent of raw material price increases.
So, can liquor companies use the same methods again in response to this round of raw material price increases? In this regard, some professionals point out that the three methods mentioned above are no longer applicable in the new wave of price hikes. Regarding the first method, "Companies need to control the magnitude and frequency of product price increases. Many liquor companies already raised prices last year, and a large number did so again at the beginning of this year. If they raise prices again soon, it may trigger market resistance."
As for the second method, companies can make efforts to absorb one raw material price increase, but what about two or three? If companies sacrifice their due profits, it is extremely detrimental to their long-term development.
As for the third method, "It is essentially the same as the second, but the second targets liquor companies, while the third targets upstream raw material companies. Raw material companies cannot sacrifice their own interests repeatedly."
In this regard, some analysts point out that with continuous raw material price increases, the original symptomatic treatments are no longer sufficient. Facing the new round of raw material price increases, it tests not only the wisdom of individual companies but also the wisdom of the entire industry.
Xu Guangsheng analyzed: In recent years, brand concentration in the liquor industry has continued to strengthen, gradually forming three tiers: mid-to-low-end, high-end, and ultra-high-end. Raw material fluctuations have little impact on high-end and ultra-high-end liquor companies with relatively high premiums, but they have a significant impact on local brands in the mid-to-low-end segment that have not yet formed comprehensive brand competitive advantages.
The rise in raw material prices in the industry is actually a phenomenon under the laws of market economy, and this economic phenomenon brought about by social development cannot be ignored.
In the short term, releasing and transferring the pressure of raw material price increases through product optimization and market optimization may not be a fundamental solution, but it may be more direct. In the long run, enhancing corporate brand value and optimizing the value chain to strengthen overall risk resistance is undoubtedly the best approach. Among these, how corporate decision-makers implement different strategies by grasping the "priorities" is the ultimate test of wisdom.
Source: Compiled from the Internet
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