A few days ago, the official website of ST Spring (600381.SH) issued a number of announcements, announcing the limited quota supply of Tinghua wine, the increase in ex-factory prices, and the export of hardcover series to sea. It is mentioned that from now on, the quota supply system will be implemented for Tinghua wine, and the total number of Tinghua products put on the market each year will not exceed 3,000 tons (including wine for sales, promotion and tasting), of which the planned quota will not exceed 1,000 tons, and the unplanned quota will not exceed 2,000 tons; Adjust the settlement price of the standard packaging distributor of Tinghua Liquor from the original settlement price to 3989 yuan/bottle; Suspend the sale of Tinghua boutique packaging (priced at 58,600 yuan/bottle) in the mainland to ensure export supply.
"Misleading consumers", 1.8 million fines landed
ST Spring is Qinghai Spring Medicinal Resources Technology Co., Ltd. (hereinafter referred to as Qinghai Spring), which is the listed company behind Tinghua Liquor. In March this year, due to suspected false publicity, Tinghua Liquor was exposed by CCTV 3.15 party, and Qinghai Spring received a regulatory letter from the Shanghai Stock Exchange, and since then, it has been implemented because "three consecutive years of losses and Daxin Certified Public Accountants (Special General Partnership) issued an unqualified opinion on the company's 2023 annual financial report with a paragraph of significant uncertainty related to continuing operations". Under the influence of a series of bearishness, Qinghai Spring's share price fell sharply, from March 15 to May 13, down nearly 40%.
At present, the official has a "final conclusion" on CCTV's exposure. On May 10, Qinghai Spring announced the "Administrative Penalty Decision" issued by the Market Supervision and Administration Bureau of Wuhou District, Chengdu City, Sichuan Province, which pointed out that in the process of selling the Tinghua series of liquor, the parties used scientifically inconclusive views and unverified user evaluations of "Tinghua" liquor to make misleading commercial propaganda and mislead consumers, which violated the first paragraph of Article 8 of the Anti-Unfair Competition Law of the People's Republic of China, which states that "business operators shall not evaluate the performance, function, quality, sales status, user evaluation, and have received honors and other false or misleading commercial promotions to deceive and mislead consumers".
The Wuhou District Municipal Supervision Bureau said that although the parties actively cooperated in the investigation process, as a food business enterprise, they knew that they should know that the relevant laws and regulations on food are prohibited from promoting the therapeutic function and efficacy, etc., and still publicized the efficacy of "Tinghua" wine and unverified user evaluations to consumers to promote the sale of "Tinghua" wine, and the subjective fault was obvious, and a fine of 1.8 million yuan was finally imposed.
Why control the volume and raise the price at this time?
Almost before and after the administrative punishment landed, Qinghai Spring regained its action. According to Times Weekly, Tinghuajiu's offline store in Chengdu has reopened on May 6; Qinghai Spring also released the above three announcements on its official website. At the same time, advertisements for Tinghua wine also reappeared in the media.
According to the announcement of Qinghai Spring, the total number of Tinghua products put on the market every year does not exceed 3,000 tons. According to a source in Qinghai Spring, a ton of 53-degree liquor can fill about 2,250 bottles of 500ml. According to this calculation, 3,000 tons of liquor can hold about 6.75 million bottles.
Cai Xuefei, an analyst in the liquor industry and general manager of Zhiqu Consulting, told Silver Persimmon Finance that the quota supply system is a conventional market management measure taken by some strong liquor companies or some liquor companies with rigid requirements for prices in order to ensure the stability of product prices, the normal circulation of channels, and prevent random prices and goods in the market. The quota supply system is quite common in the high-end liquor industry, and relevant information shows that since 2018, Shanxi Fenjiu (600809. SH) gradually carried out the management of the sales quota system for a full range of products in the national market, and formulated the quota control and coordination of dealers at all levels throughout the year, quarterly, and at all levels; Kweichow Moutai (600519. SH), Wuliangye (000858. SZ), Luzhou Laojiao (000568. SZ) and other high-end liquors such as Feitian Moutai, Puwu and Gaoguojiao have also maintained a balance between supply and demand through measures such as quota system and digital code scanning to ensure that the batch price is maintained within a reasonable range, so as to stabilize the channel price system and market expectations.
The implementation of the quota system and the control of production and sales also means that Qinghai Spring may consider stabilizing products. At the same time, the settlement price of Tinghua wine standard distributors was adjusted to 3989 yuan / bottle. Qinghai Spring did not disclose the price adjustment ratio, but according to liquor industry sources, an authoritative source said that the price increase of Tinghua standard packaging is certain, and the price increase is not low.
However, it is worth noting that Qinghai Spring mentioned that for dealers who have signed contracts before the notice is issued, within the scope of the annual purchase quota agreed in the agreement, the settlement price of the standard package of Tinghua wine is still implemented according to the price before the adjustment.
This series of actions, from the perspective of guidance, will undoubtedly bring benefits to the original dealers of Qinghai Spring. According to the annual report of Qinghai Spring, the company has selected 38 Tinghua liquor distributors and opened 16 Tinghua liquor experience stores in Beijing, Chengdu, Tianjin, Jinan, Yantai, Dongying, Jinhua, Suzhou and other cities. After being exposed by CCTV, the official account of Tinghua Liquor was banned, and many e-commerce platforms once removed Tinghua Liquor products, and the dealers of Qinghai Spring may have suffered losses as a result. In addition, according to relevant media reports in March, the Shanghai Jing'an District Market Supervision Bureau has filed an investigation into Shanghai Tinghua Biotechnology Co., Ltd., the Shanghai agent of Tinghua Liquor.
Ouyang Qianli, an observer of the wine industry, told Silver Persimmon Finance: "Although Tinghua Liquor has increased the price, the purchase quota of the original distributor is still the original price, and only the part that exceeds the quota will be implemented at the new price." The inventory of the original dealers has achieved value preservation or even appreciation in a sense, so the original dealers will express their support. Ouyang Qianli further pointed out that listening to the price increase of Huajiu is also to show the industry and outside the industry, after experiencing 3.15 public opinion, "still able to fight, the more brave the war", to the market, the capital market released a positive signal.
Sky-high products "go to sea" or to avoid public opinion
In addition to controlling the volume and raising the price, Qinghai Spring also said that it would "go to sea". According to the "Notice on the Export Sales of Tinghua Boutique Series Products for Export Only", the company has decided to suspend the sales of Tinghua boutique products in the mainland to focus on ensuring export supply. This also means that this high-end liquor, with a price of nearly 60,000 yuan, can only be displayed in experience stores in China in the future, and will not be sold.
On Qinghai Spring's official website, the advertising slogan of Tinghua Liquor has been replaced with words to describe its taste, and it is specially marked "for export only" at the back of the boutique packaging.
However, it is not easy for liquor to go overseas, according to the data captured by the National Bureau of Statistics and the General Administration of Customs captured by Flush iFinD, in 2023, China's liquor exports will be 14,700 kiloliters, accounting for 0.33% of the national liquor production that year.
Tariffs are a big factor behind this. Sun Baoguo, an academician of the Chinese Academy of Engineering, has pointed out that there is a serious imbalance in the tax rates of Chinese liquor and international spirits in their respective markets. In China, distilled spirits such as whiskey and brandy are subject to the import tariffs and tax rates given by the mainland; However, Chinese liquor has no corresponding tax items and tax rates abroad, and is characterized as a special food and levied high tariffs, "The internationalization of Chinese liquor is progressing slowly, and the international market share is very small, so to promote the internationalization of Chinese liquor, it is urgent to solve the problem of serious asymmetry in the current tariff rate and realize the equal tax rate of distilled spirits."
For the high-priced Tinghua wine, after the tariffs are imposed, its overseas price may be even more staggering.
However, in Ouyang Qianli's view, there is another reason for listening to flowers going to sea. "In China, the sales of 58,600 yuan/bottle of wine are very small, and most of them are used for tasting and gifts. However, when the public mentions this sky-high price of wine, they will think of 'extravagance' and even 'corruption', and transfer the products that are not sold much but have public opinion attention to overseas sales, and Qinghai Spring is more out of public opinion considerations. ”