Core Viewpoint - The price of Moutai liquor has experienced a significant decline, with wholesale prices dropping nearly 50% from three years ago, leading to a crisis of trust in the brand [1][3]. Price Collapse - In 2025, the price of Moutai liquor fell sharply, with the wholesale price of the 53-degree Flying Moutai dropping from 2,220 yuan per bottle at the beginning of the year to 1,780 yuan by June 25, marking a decline of 440 yuan or 19.82% [3]. - By October, prices continued to decline, reaching a historical low of below 1,700 yuan during the autumn sugar and wine fair [3]. - Moutai's stock price has also suffered, dropping over 40% from its peak of 2,400 yuan in early 2021 [3]. Four Key Factors - The implementation of strict alcohol consumption policies in May 2025 has significantly impacted Moutai's market, reducing the proportion of government-related consumption from 40% in 2012 to 0.8% [5]. - An oversupply situation has emerged, with Moutai's base liquor production increasing from 49,900 tons in 2019 to 83,700 tons in 2024, leading to a loss of the brand's scarcity narrative [7]. - The rise of direct sales and e-commerce platforms has disrupted traditional distribution channels, with platforms like Pinduoduo offering Moutai at significantly lower prices [7]. - Changing consumer demographics, particularly among the younger generation, have shifted perceptions of Moutai from a luxury item to a tool for business gatherings [7]. Moutai's Response - Moutai has initiated measures to stabilize prices, including limiting supply to certain channels and engaging with major e-commerce platforms [9]. - The company has increased market inspections and will impose penalties on distributors who violate pricing regulations [11]. - Moutai has also introduced new products, such as the 70th Anniversary Five-Star Moutai priced at 7,000 yuan, which has seen resale prices soar on secondary markets [11]. Performance Resilience - Despite the price volatility, Moutai's financial performance remains robust, with a reported revenue of 506 billion yuan in Q1 2025, a year-on-year increase of 10.54% [13]. - For the first half of 2025, Moutai achieved total revenue of 910.94 billion yuan, up 9.16% year-on-year, slightly exceeding its growth target [15]. Future Outlook - Market opinions on Moutai's future pricing are mixed, with some suggesting that prices near the production cost could lead to a halt in sales by distributors [17]. - Moutai has paused sales of its 500ml Flying Moutai in direct stores and is working with e-commerce platforms to manage online pricing, which may provide a rebound in demand during peak seasons [17]. - The company is focusing on transforming its customer base and service offerings to appeal to younger, high-net-worth individuals [20]. - Current inventory levels indicate a significant supply, with estimates suggesting that every Chinese household could receive nearly two bottles of Moutai [22].