The Spring Festival has always been the peak sales season for the baijiu industry, yet Wuliangye, a high-end baijiu giant, has suddenly stopped shipments. Hushuo Youli confirmed this news from Wuliangye. Distributors also revealed that after the price of Wuliangye's core product, 52-degree Pu Wu (crystal bottle), was raised by 60 yuan to 739 yuan per bottle during the 2016 Mid-Autumn Festival, some distributors' wholesale prices are now approaching 800 yuan in regions with strong market performance.

1 "Pu Wu" Wholesale Prices Continue to Climb

It is understood that after the introduction of the national Eight Regulations at the end of 2012, the high-end baijiu industry entered a downturn. At the beginning of 2013, the ex-factory price of Wuliangye Pu Wu was 729 yuan, but the wholesale price was only 620 yuan, resulting in a serious price inversion.

In May 2014, Wuliangye announced a reduction in the ex-factory price of Pu Wu from 729 yuan to 609 yuan per bottle. At that time, Wuliangye stated that the price adjustment was to further capture market share and boost distributor confidence.

More than a year later, in August 2015, Wuliangye suddenly announced that the ex-factory price of Pu Wu would be raised from 609 yuan to 659 yuan per bottle, an increase of 50 yuan per bottle.

In March 2016, the ex-factory price of Pu Wu was raised by 20 yuan to 679 yuan; and by the Mid-Autumn Festival in September 2016, Wuliangye raised the price of Pu Wu by another 60 yuan to 739 yuan, reaching the highest level since the Eight Regulations.

However, after the price increase to 739 yuan last Mid-Autumn Festival, there were still some wholesale prices in the market even lower than the ex-factory price of 739 yuan. In response, a Wuliangye official said that this was likely due to some small inventories that distributors had purchased earlier at prices above 600 yuan.

Notably, by the end of December 2016, the wholesale price of Wuliangye Pu Wu successfully exceeded 739 yuan per bottle, achieving profitable sales. Recently, with the arrival of the Spring Festival peak season, wholesale prices have shown a trend of continuous increase. "Currently it is close to 800 yuan per bottle. This aligns with the common interests of both the manufacturer and distributors," a distributor told Hushuo Youli.

2 Sudden Halt in Shipments Before the Festival Despite No Room for Volume Increase

What is even more interesting is that despite it being the peak sales season, some distributors revealed to Hushuo Youli that Wuliangye suddenly stopped shipments before the festival, and many distributors who requested additional volume were unsuccessful.

On January 23, a Wuliangye official confirmed the above news to Hushuo Youli and stated that due to the surge in consumption during the Spring Festival peak season and various logistics factors, Wuliangye is severely short of stock in many markets across the country. The deadline for shipments was January 21. Currently, we have indeed received many requests, with most distributors asking for additional volume, but the company has no volume to increase.

It is understood that the Wuliangye market is currently experiencing a simultaneous rise in both volume and price, not only for Crystal Bottle Wuliangye but also for Wuliangye low-alcohol series and Wuliangye 1618. A Wuliangye official told Hushuo Youli that in 2016, Wuliangye Group's sales revenue exceeded 70 billion yuan, and profits exceeded 10 billion yuan; while the specific data for the listed company's annual report is not convenient to disclose at present, as of now, the listed company has also achieved growth in both indicators, "distributor inventory has reached an all-time low, at only about 8%".

Despite the halt in shipments of Pu Wu, it is worth noting that Wuliangye has launched a down-to-earth marketing campaign for its other core products, Wuliangye 1618 and Wuliangye low-alcohol series. It is reported that from now until the end of February 2017, consumers who purchase one bottle of the promotional product will receive a lottery card and have the chance to win a luxury cruise trip abroad for a family of three. This is also the first time that a famous baijiu brand has conducted a direct consumer marketing campaign on its core products.

3 Retail Prices Reach as High as Over 900 Yuan

Since the introduction of the Eight Regulations, after four years, Wuliangye's prices have been recovering and continuously rising, and it is rare for the company to suddenly stop shipments before the Spring Festival this year. Some distributors believe that the first reason is the recovery of the high-end liquor market. "From the current situation, the recovery of the high-end liquor market this year has exceeded expectations," a major Wuliangye distributor with terminal stores and direct consumer contact told Hushuo Youli. In the past two years, the peak season feeling only became obvious in the week before New Year's Eve. However, this year, starting from January, various business banquets, friend gatherings, and New Year shopping began, and many consumers are willing to choose Wuliangye.

It is understood that during the most prosperous consumption festival of the year, Wuliangye Pu Wu is out of stock in many places. A distributor told Hushuo Youli, "Wuliangye is a rigid demand product. When supply is less than demand, prices will definitely rise."

In fact, the price increase is also closely related to consumer psychology. Currently, the overall baijiu market is showing a trend of price increases. For consumers, there is a mentality of buying on the rise rather than on the fall, which has led to high purchasing enthusiasm.

Hushuo Youli found at Carrefour that the retail price of Wuliangye Pu Wu is 829 yuan; and according to media reports, at Ito Yokado Shuangnan store, a high-end mall in Chengdu, the price of Crystal Bottle Wuliangye even reached 928 yuan per bottle, with no promotional discounts. In some famous tobacco and liquor stores, the price is 820 yuan per bottle. The price of Wuliangye Pu Wu at the terminal level has indeed generally increased.

However, Hushuo Youli found at a liquor store in Beijing that Pu Wu can still be purchased for around 740 yuan. In response, a Wuliangye official said, "This is most likely a small amount of old inventory from distributors, probably old-style Pu Wu. Otherwise, why would they not take advantage of the profit?" Another liquor store owner told Hushuo Youli, "There is not much stock now, and prices should continue to rise in the coming days."

It is worth noting that at a previous regional meeting of Wuliangye, relevant leaders stated that in 2017, price increases and refined management will ensure that customers can better profit and complete the annual tasks smoothly. Clearly, Wuliangye prices may continue to rise throughout 2017.

Source: Hushuo Youli (ID: hushuoyouli8) -END-