The Market of Chinese High-end Liquor Faces Fierce Competition

During the period of spring rum held in the past serval days ago， the companines which produce high-end liquor took a lot of measures in marketing. The Wuliangye Group released the signal that prices of its core products will be raised once again from a range of 70 to 90 yuan. The Maotai Group has set a sale target of t4.3 billion bottles for its sauce fragrant wine and released four new strategic products. Shuijingfang launched its new master series of high-end prod-ucts， whose he suggested retail price in the market is 899 yuan .

By looking at the market situation after the Spring Festival， since the beginning of 2016 the trend

of high-end liquor to pick up seems to continue. Mr. Zhang has more than 20 years of experience

in the liquor industry told the"China Business" reporter in at the spring rum that this situation can not be separated from the emergence of high-end liquor brand scarcity. The unique quality is qualification guarantee that high-end liquor can raise prices.

Theoretically， after the Spring Festival， with the weather gradually pick up， the consumption of liquor will usher in a off-season， replaced by the arrival of beer sales season. However， this years high-end liquor is undoubtedly not in off-season. Liquor industry analyst Cai Xuefei said that this is the result of a variety of factors together.

Prices pick up instead of dropping in traditional offseason

D u r i n g t h e s p r i n g r u m ， Shuijingfang held a news conference in Chengdu， and launched a highend product named Shuijingfang Collection Master which is more expensive （its market suggested retail price is 899 yuan） than its two core products Zhenjiang No. 8 and Jingtai. Xinagfu Fang， general manager of Shuijingfang， said the launch of the product is an important measure of the company to further consolidate the advantages of high-end market..

At the same time， during the spring rum the Wuliangye national brand marketing conference is also held in Chengdu. Mr Liu， the general manager of Wuliangye Group， said that in 2017 Wuliangye Group will adjust and enhance the price of core products， " It is expected that in the next 4 to 6 months， there will be a up space of 70 to 90 yuan ."

In fact， this is not the first time Wuliangye price increase this year. As early as mid-February， Wuliangye announced the price of a part of products to be raised. Business supply price "Pu Wu of 52 degrees " was adjusted to 809 yuan， retail price to 899 yuan. In addition， the price of other products and other brands have also risen.

The wave of price raise of highend liquor can be traced back last year. During spring rum of 2016 Wuliangye announced price would increase， then Maotai， Luzhou， and other brands have joined the tide of price increasing ， and also leaded to the price increase of the rice wine. Price increase became keywords of wine industry in 2016， and it was considered by industry insiders that the liquor industry had"comprehensively recoveried".

Chen Zhe ， a dealer from the Hebei Province told reporters that from the beginning of last year to the present， high-end liquor prices rose by an average of 15% to 20%."Maotai rose from 800 yuan or so to about 1，200 yuan， Wuliangye rose from 500 yuan to about 800 yuan， only Jiannanchun did not rise much， each bottle probably rose 5 yuan to 10 yuan.

Chen Zhe said， taking the current liquor industry market conditions into account， "this price increase has been considered relatively high，" and that whether the dealer will follow the price increase is not a sure event， "it needs to take the sales volume into consideration， if sales fell significantly it is not worthwhile to do so. He also pointed out that it also needs to consider the market share and brand loyalty situation.

Cai Xuefei pointed out that after the Spring Festival， high-end liquor prices do not drop behind the surge is the result of a variety of factors resonance. By looking at the big picture， this is the continuation of the trend of high-end liquor since last year. In addition， he added that the premium brand wine is the leader of the recovery in the tide， which is inseparable from their development strategy， that is， by constantly raising the price of premium brand product to enhance the brand value of the entire enterprise.

In fact， by looking at the situation at the spring rum， it is can be seen that the wine business is indeed more and more valuing its brand value. To take one of the old four famous wines Xifeng for example， when it recruits the current dealer it takes dealers team level， technical capacity and marketing platform more important， rather than the profit.

Mr. Zhang told reporters at the spring rum， this price increase tide was promoted by the reality that"from the characteristics of the liquor industry， the current consumption of the absolute consumption of the entire Chinese liquor is reduced， only increase the price can the company keep their own profit margins. "

As for the successive price increases， Wuliangye who takes an important role in the Chinese market said that this years Wuliangye marketing focus is to building Wuliangye brand value， to enhance the price， to optimize and form the core brand product system.

Acquisition of area wine enterprises of high-end brands

Cai Xuefei pointed out that the current high-end liquor is still on the warm wave， and from the market reaction， price increases is still acceptable. He said that this trend will continue with the consumption upgrade and a large number of external capital into the market as a result the future business will be toward in two directions： the brand and capital.

"Small and medium-sized liquor enterprises in the future will face mergers and acquisitions or closure， and industry branding and concentration will be higher and higher，" Cai Xuefei pointed out.

Li Xiaogang Luzhou， executive vice president of Laojiao Co.， Ltd.， also said in the spring rum meeting that high-end wine production was scarce， highly concentrated and stable， over the past three years shuffle has been completed. Maotai， Wuliangye，Luzhou three giants basically occupy more than 90% share.

For the current domestic highend liquor competition pattern， Mr. Zhang told reporters that the current competitive situation has been relatively settled， "In fact， the competitive pressure of domestic high-end wine is smaller than the low-end products； on the one hand for the premium brand， its market position has been relatively fixed； the other hand， the scarcity caused by the historical accumulation of the brand and the natural environment created a premium brand， and excellent quality of wine is difficult for people to create short-term.

Cai Xuefei has a similar to this. He said Maotai， Wuliangye， Yang River， etc. have a very accurate market positioning， it is difficult to erode the market share between each other . "In fact， what they bought are the original regional wine enterprises in the highend brand market.”

"This competition began in early 2013. It is a new trend that comes with the adjustment of the wine industry， and this trend is continuing with two new directions ： one for brand concentration and the other is the scale effect， the advantage of premium brand will be further strengthen， "Cai Xuefei pointed out that" this trend will not be a big change in the short term， until the overall pattern of white reaches a stability， new marketing competition which is not simply by the price， but the integration of capital and brand differentiation.

With high-end products price increase， the voice of the wine industry ushered in the recovery is endless. Whether it will lead to lowend liquor prices rise attracted much attention .

"It is difficult，" Mr. Zhang told reporters， "For most ordinary consumers， the consumption accounted for the total consumption of three or four percent is the highest value they can accept， you can say that low-end wine products still is the mainstream consumption level of the majority of consumers . From this point of view the low-end wine prices may be difficult to follow up.

Cai Xuefei also think that lowend products do not necessarily pick up. He said that the manufacturers in fact need to focus on a price section， for example Luzhou Laojiao and Xifeng， from the beginning of last year cut off a lot of low end products， which is the so-called "price section strategy." "With the future competition focuses on brands， lowend not only does not necessarily pick up， but also may be weakened，" Cai Xuefei added that because for the premium brand， the low-end products can be the "complementary products" of high-end products， its main competitors are regional wine enterprises， but taking into account the latter in the local market often have unparalleled advantages， it is expected that the low-end products of big companies are difficult to have large improvement.