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      Government demands cease of liquor price hikes

      2011-09-23 14:44    Ecns.cn     Web Editor: Wang Fan

      (Ecns.cn) –High-end Chinese liquor brands such as Maotai, Wuliangye and Yanghe have all announced price hikes with the arrival of the peak season for alcohol consumption in September. Under pressure from rising inflation, the National Development and Reform Committee (NDRC) is now requiring liquor prices and supplies to remain stable, following a meeting held last week concerning the issue.

      On Thursday, an initial written proposal was released on the official website of the China Alcoholic Drinks Industry Association. It quoted the NDRC's requirement of the liquor industry to stabilize both the prices and supply of their products, and proposed that they avoid hoarding, speculation and spreading information of possible price hikes.

      In late August, leading Chinese liquor producer Wuliangye said it would raise prices of its products by an average of 20 to 30 percent starting from September 10. This sounded another note of warning for the government about how difficult it will be to rein in inflation.

      Soon, predictions surfaced that other spirit brands such as Maotai and Yanghe might also make similar moves. Before any formal announcement, rumors had already been disseminated among the public, and the price of Maotai products rose by an average of 100 yuan ($15.46) in less than a month.

      Maotai is considered China's top brand, a major status symbol and the drink of choice at many state functions. It was used by Chinese leaders to toast dignitaries such as Richard Nixon, Kim Il-sung, Margaret Thatcher and Ho Chi Minh.

      Liquor prices traditionally rise whenever the Golden Week Holiday approaches. But as of today, no other spirit brands have announced price increases.

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