1、Kweichow Moutai has announced on its official website that the companys new policies will soon be published under the guidance of China National Development and Reform Commission and the local bureau of commodity prices in Guizhou Province.Moutais chairman Yuan Renguo said at the end of 2012 that th
2、e key task for Moutai is to prevent the retail market prices from decreasing.Lawyer Han Liang says according to the China Anti-monopoly Law, a company is forbidden to set fixed or base prices for distributors. This is a price monopoly.Companies are not allowed to set minimum retail prices for distri
3、butors, this is what we call vertical price monopoly. It may mean that consumers have to pay higher prices for the product.Media reports Moutai has punished three distributors for breaking the companys price discipline to sell Moutai liquors at lower prices. However, lawyer Han Liang says the punish
4、ment has broken the China Anti-monopoly Law. When being asked about the possible punishment, Han Liang says:One possible penalty that Moutai company will face is a fine. As for how much the fine will be, its decided by the National Development and Reform Commission based on the current anti-monopoly
5、 law, its probably 1 to 10 percent of the total sales revenue, so this is very harsh punishment.Once Moutai changes its marketing polices, distributors will have certain autonomy in deciding the retail prices of Moutai. As the coming Spring Festival is traditionally a liquor consumption boom time, m
6、any distributors will prefer to clear inventories rapidly with low prices, something which is believed to affect the prices of high-end liquors to some degree.An industrial insider Zhao Jun says a high price does not necessarily mean high quality.The overpriced liquor is actually kind of bubble. Whe
7、n the bubble is broken, a high quality product should be priced more reasonably.Some people believe that tightening entertainment expenses of governmental and public departments will affect the sales of high-end liquor in the New Year season.In addition, people are becoming more rational when select
8、ing liquor. Media report says Moutai has fallen out of the top 10 preferred brands used as business or personal gifts by Chinas millionaires, but it was still the only Chinese brand to make it into the top 15.The Hurun Reports Chinese Luxury Consumer Survey 2013, released recently, shows the Chinese liquor brand dropped from 5th place last year to 13th in the list of preferred gift brands.For CRI, I am Zhang Wan.
