Wuliangye, the leading liquor with strong aroma, followed Moutai to raise prices!
On January 30, a number of market sources said that the ex-factory price of Wuliangye's core single product of the eighth generation of Wuliangye will be increased from the current 969 yuan to 1019 yuan, an increase of 50 yuan, a price increase of about 5%, and it will be implemented from February 5. **Times reporters tried to contact Wuliangye, but so far have not received a reply.
However, a dealer revealed to reporters that he had received a notice from Yibin Wuliangye Distillery that the ex-factory price was raised by 50 yuan, which officially started on February 5.
Wuliangye's core major products have increased their prices
After Kweichow Moutai officially announced the price increase, Wuliangye also followed up with a price increase. The ex-factory price of Wuliangye's products raised this time is the core single product of the eighth generation of Wuliangye, which was raised by 50 yuan to 1019 yuan.
Previously, Wuliangye Chairman Zeng Congqin said at the 2023 December 18 Consultation, Co-construction and Sharing Conference that he would choose the opportunity to appropriately adjust Wuliangye's factory **, pay attention to the overall planning of the relationship between quantity and price, pay attention to product-oriented market operation, pay attention to differentiated product development and cultural wine development, pay attention to the value mining of old wine, and pay attention to the assessment and incentive of the marketing process.
It is worth mentioning that although the ex-factory price of the eight generations of Wuliangye has been raised, the market guidance price is still 1499 yuan, and the reporter learned from the offline large supermarkets and online e-commerce platforms that the market of the eight generations of Wuliangye is about 1100 yuan. This means that after the price increase of the eighth generation of Wuliangye, the net profit of the dealer will be even more meager.
Zeng Congqin mentioned in his speech to dealers across the country that "the dealers who sell Wuliangye will not suffer losses", and gave the Wuliangye market strategy solution of "making consumers willing to buy and letting channels willing to sell". It is reported that in the 2024 contract signed between Wuliangye and distributors, the eighth-generation Wuliangye plans to reduce the volume by 20% within the year.
The common practice in the liquor industry is to achieve a high price by reducing the amount of input. If dealers want to increase channel profits, they can only transmit the part of the manufacturer's price increase to the terminal market, and the market transaction channel profit will naturally return. Industry analysts told the **Times reporter that combined with the current market environment, it is easy for manufacturers to raise prices, but it is difficult to transmit to the terminal. If the manufacturer's ex-factory price is raised, but the market price remains unchanged, dealers will face greater pressure.
In the past, the narrowing of channel profits and the inversion of batch prices were one of the problems restricting the improvement of Wuliangye's brand value. Guoxin ** believes that the reduction of the Puwu plan within the year is the due meaning of the company to achieve a positive feedback loop of volume and price, and the follow-up in dealers and terminals or cherish the quota of Puwu, or promote the upward increase of the batch price. Wuliangye's good start policy is still implemented according to the original ex-factory price, and it is expected that under the expectation of unplanned quota price increases, dealers' willingness to collect payments will be greatly increased to ensure that the performance target in 2024 is achieved. In addition, in 2024, the company will take the initiative to increase 2%-3% of the marketing process assessment rewards to ensure the profitability of dealers while ensuring the stability of the market order.
Contribute to the return of value
The increase in the ex-factory price of Wuliangye's core product of the eighth generation of Wuliangye is conducive to promoting the reasonable return of the first product to the brand value.
In recent years, the construction of a "community of destiny for manufacturers" has been one of the focus of the company's channel work, in the context of intensified competition in the industry, the market price and ex-factory price of Wuliangye of the eighth generation even showed signs of inversion. Industry analysts pointed out that the increase in the factory of eight generations of Wuliangye will help boost the confidence of dealers and hedge the impact of the year's reduction.
Soochow** believes that the signal transmission of Wuliangye's 2024 volume control and price increase will help stabilize channel expectations, and it will also greatly promote the collection of payments in the short term. Although it remains to be seen that channel profitability will improve substantially, the company's support for dealers is expected to increase in 2024.
On January 28, 2024, at the 2023 work summary meeting of the 4th Council of Sichuan Brewery Association, Yang Yunxia, chief engineer and food safety director of Wuliangye Co., Ltd., revealed that in 2023, Wuliangye Group Co., Ltd. will achieve double-digit growth in sales revenue and total profit.
In the past, the company's revenue was overly dependent on the volume of the five major single products, and then there was a dilemma that it was difficult to balance the volume and price. In recent years, the company has continued to develop non-standard cultural liquor, established a liquor design center, and created the Zodiac series, Hemei series, old liquor series, etc., continuously enriching the company's product matrix and alleviating the growth pressure of the main product Puwu.
A few days ago, Wuliangye launched the Wuliangye Year of the Dragon Zodiac Wine priced at 2,980 yuan, with a limited edition of 99,999 bottles and a daily production capacity of about 800 bottles. Due to the exquisite design of Wuliangye Dragon Zodiac Liquor and the lucrative channel profits, the current dynamic sales are relatively strong, and the batch price has risen to about 3,300 yuan. Guoxin** believes that the hot sale of Wuliangye Zodiac Liquor in the Year of the Dragon is one of the achievements of the company's continuous creation of cultural and creative liquor in recent years, and it is expected that non-standard cultural and creative liquor will continue to enrich the brand connotation of Wuliangye, enhance the height of Wuliangye brand, and form a two-wheel drive pattern of "main product-non-standard product".
Will other wine companies follow?
On November 1, 2023, after Kweichow Moutai officially announced the adjustment of the ex-factory price of Feitian and five-star series Kweichow Moutai, speculation in the market about who is the second liquor company to adjust the ex-factory price has emerged. Now, Wuliangye has also adjusted its ex-factory price, and whether other liquor companies will follow up has become the focus of market attention.
Moutai's price increase is mainly due to its brand influence and market supply and demand, rather than the overall cost of the industry. Other brands of liquor need to consider various factors such as market demand and product positioning when facing price increases, so they may not easily follow the price increase. However, if the cost of raw materials, labor costs and other factors continue to rise, it may have a certain impact on the quality of other brands of liquor. Liu Yan, chairman of Anjue Assets, said.
At present, the inventory pressure faced by liquor companies is also one of the factors restricting the price increase of liquor companies. Zhuang Hongdong, manager of cheese**, said that the batch price of most other brands of mainstream products in the secondary market is generally lower than the nominal ex-factory price, showing an "upside-down" situation, so in the context of insufficient channel profit margins, manufacturers lack the motivation to raise prices, and in the stage when the economic momentum needs to be improved and the overall terminal demand of the industry is relatively weak, blind price increases may hit the enthusiasm of dealers.
He believes that the follow-up trend of other liquor brands still depends on the changes in the supply and demand structure of the market, that is, the supply situation at the factory end and the recovery of economic fundamentals.
Editor-in-charge: Zhu Yumeng.
Proofreading: Zhu Tianting.
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