Moutai reduced prices and "trapped" Wuliangye

Kanjian Finance

2024-07-02 09:06Creators in the field of finance and economics

The impact of the decline in the price of Kweichow Moutai continues.

As of July 1, the market price of Moutai Feitian (scattered) in 2024 is about 2,300 yuan, and the price is still further "down".

However, in this round of price cuts, Kweichow Moutai may not be the most panicked one, although the price of Feitian Moutai is indeed falling, but now the market price is still above 2000 yuan, and the guide price of 1499 is still not a small distance, but it is the industry's "second" Wuliangye, the situation seems to be more embarrassing.

Recently, Kweichow Moutai has attracted a lot of attention because of the price drop, but Wuliangye is not much better.

According to media statistics, in the 10 billion subsidy channel of a large e-commerce platform, the price of Wuliangye's eighth generation Puwu is as low as 836 yuan per bottle after the subsidy; As of July 1, the batch price of Wuliangye's eighth-generation Puwu was around 940 yuan/bottle, in other words, the price of Wuliangye's eighth-generation Puwu had been upside down by more than 100 yuan.

In addition, under the influence of the wave of price cuts, Wuliangye's stock price is also declining.

As of the close of trading on July 1, Wuliangye's share price closed at 128.3 yuan / share, compared with the highest point of 159.8 yuan / share on May 20, in less than a month, Wuliangye's share price has fallen by more than 15%, and its market value has shrunk by more than 100 billion.

Pressure to cut prices

As an industry leader, Moutai is like an "anchor" that determines the trend of all liquors.

The same is true of Wuliangye. Looking back on the past, the prices of Moutai and Wuliangye's core products are almost "up and down".

In 1988, China's liquor was deregulated, and enterprises carried out independent market-based pricing, at that time, Moutai was priced at 250 yuan per bottle, while Wuliangye was priced at 120 yuan per bottle. In the later period, the price of Wuliangye once surpassed Moutai - successive price increases, so that the price of Wuliangye directly surpassed Moutai in 1995.

However, due to Wuliangye's own strategic mistakes, in 2008, Moutai's market transaction price once again surpassed Wuliangye, and four years later, Moutai adjusted the ex-factory price to Wuliangye, and Kweichow Moutai officially surpassed Wuliangye. However, although the price of Moutai is higher than that of Wuliangye, the two are still "up and down".

For example, in January 2018, Moutai raised the price from 819 yuan to 969 yuan, while Wuliangye adjusted the price from 739 yuan to 789 yuan. A few years later, Wuliangye raised the price again, and the price was raised to 969 yuan.

Of course, in addition to keeping up with Moutai, Wuliangye is also "normal" to follow up. For example, in 2012, the price of Moutai fell sharply under the "plasticizer" turmoil, from 2,000 yuan/bottle at the beginning of the year to about 1,500 yuan/bottle.

By 2013, the price of Moutai had dropped to more than 800 yuan per bottle. At the same time, although Wuliangye chose to raise prices against the trend, due to the serious price inversion, Wuliangye finally had to adjust the ex-factory price to 609 yuan in 2014.

In fact, as two insurmountable "mountains" in the liquor industry today, Moutai and Wuliangye can be said to be tied together, once the price of Moutai has any "wind and grass", it will have a huge impact on Wuliangye, for example, this time the price of Feitian Moutai has fallen, and the price of Wuliangye's core product "Eighth Generation Puwu" has long been upside down.

According to media statistics, in the 10 billion subsidy channel of a large e-commerce platform, the price of Wuliangye's eighth generation Puwu is as low as 836 yuan per bottle after the subsidy; As of July 1, the batch price of Wuliangye's eighth-generation Puwu was around 940 yuan/bottle, in other words, the price of Wuliangye's eighth-generation Puwu had been upside down by more than 100 yuan.

From the current point of view, although prices are falling, the situation of Wuliangye is obviously much more severe than that of Moutai.

Difficult to break through the dilemma

In fact, before the emergence of this round of price reductions, Wuliangye had fallen into a "predicament".

According to the financial report, Wuliangye achieved revenue of 34.83 billion yuan in the first quarter, with a growth rate of 11.86%; The net profit was 14.05 billion, with a growth rate of 11.98%.

Although the performance in the first quarter still maintained a "double-digit" growth, such a performance growth rate of Wuliangye has been maintained for many quarters, and the overall performance lacks bright performance.

Moreover, compared with their peers, the revenue growth rate of Shanxi Fenjiu and Luzhou Laojiao in the first quarter was 20.94% and 20.74% respectively, and the net profit growth rate was 29.95% and 23.2%.

In addition to the slowdown in growth, the inability to sell goods is also a major problem that Wuliangye is difficult to solve. As mentioned in the above content, the current price of Wuliangye's core product "Eighth Generation Puwu" has long been upside down; Judging from the financial report data, the inventory of Wuliangye in the first quarter of this year was as high as 16.29 billion, and in the first quarter of 2022, the inventory of Wuliangye was 13.85 billion.

In addition, Wuliangye's long-standing dealer problem has not yet been resolved. Wuliangye adopts the "big dealer" model - taking the region as a unit, designating a strong dealer to be fully responsible for the sales activities of Wuliangye in the region, and setting up secondary and tertiary distributors, thus forming a multi-level distribution model, before 2010, Wuliangye has achieved rapid expansion by virtue of the "big dealer" model. However, with the passage of time, Wuliangye's big distributors gradually became bigger, and these big distributors controlled most of the channels, and even had the "pricing power" of Wuliangye, while Wuliangye, as a wine company, lost control of the channels.

In the face of multiple pressures, Wuliangye is also actively adjusting. Since last year, Wuliangye has continuously adjusted its policies, first "controlling the quantity" - reducing the amount of Pu Wu by 20% to the quota of 889 yuan in the plan, and it is expected that the ratio of the plan and the unplanned will remain unchanged, still 3:2;

Of course, judging from last year, Wuliangye's attempts may still have a positive effect, but now even the price of Feitian Moutai is "unbearable", and the pressure on Wuliangye can be imagined.

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