Moutai’s market value exceeds LVMH as it raises Baijiu prices

China’s Kweichow Moutai, the country’s leading Baijiu producer, has surpassed LVMH Moet Hennessy Louis Vuitton in market capitalisation to become the most valuable stock on Bloomberg Intelligence’s Global Luxury Goods Top Peers Index.

This is another win for the Baijiu producer after it already became the world’s most valuable liquor brand, overtaking Diageo last year.

Moutai’s market value on Tuesday ended on US$151 billion in Shanghai, ahead of LVMH’s US$149 billion, reported Bloomberg.

The surge came also just days after Moutai announced on 28 December that in 2018 it would raise its product prices an average of 18%, as reported by China’s state news agency Xinhua. This would be the first price hike for its flagship brand, the ‘Flying Fairy 53%’, in five years.

Yuan Renguo, president of the Guizhou-based distillery, revealed that the wholesale prices of its products would increase between 9% and 25%, a “reasonable” range as he describes.

It’s unclear as yet how much this will affect the mainland market, where 95% of its products are sold, but demand for the fiery spirit has been bullish in China.

In the latest report from Moutai, the distillery produced 42,700 tonnes of Baijiu, a year-on-year increase of 9%. It predicts a sales value increase of around 50% for 2017, which would bring its annual revenue to more than RMB 60 billion (US$9.2 billion).