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      Price of Maotai expected to spike ahead of New Year

      2011-11-24 14:31    Ecns.cn     Web Editor: Su Jie
      Analysts from Guodu Securities say they believe that Maotai is very likely to raise its prices again around Spring Festival.

      Analysts from Guodu Securities say they believe that Maotai is very likely to raise its prices again around Spring Festival.

      (Ecns.cn)--As Spring Festival, or Chinese New Year, approaches, one of the best-known brands of liquor and the "national spirit" of China is set for a new round of price hikes, insiders say.

      Maotai, brewed in Guizhou Province, has for decades been considered one of the country's leading alcohol brands and a symbol of status, and is regularly served at state dinners and official government functions.

      The company's latest financial reports revealed that its gross profit margin from June to September hit 91.53 percent.

      Analysts from Guodu Securities say they believe that Maotai is very likely to raise its prices again around Spring Festival.

      That belief is fortified by China Galaxy Securities, which predicts that Maotai might announce the price increase later this year or early next year.

      "Maotai has become China's Louis Vuitton," reported CNN last March, citing Liu Yuan, general secretary of the National Association for Liquor and Spirits Circulation.

      The cost of "Feitian Maotai," a sub-brand with an alcohol content of 53 percent, has already nearly doubled since last year, and is now up to 2,180 yuan, reported the Guangzhou Daily. Speculative transactions and insider expectations of price increases ahead of the country's annual peak of alcohol consumption may have spurred the rise, the report added.

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