Moutai to invest US$70m in Chinese rice wine

By Jennifer Phang

- Last updated on GMT

Related tags: Wine, Alcoholic beverage

Moutai to invest US$70m in Chinese rice wine
Kweichou Moutai, the leader in rice wine in China has disclosed plans to invest 437 million yuan ($US69m) in 2012, to produce an additional 2800 tonnes of wine.

The investment is part of the company’s “second phase of its five-year development plan”​ and the investment will be used to enhance the Moutai Prince wine technological transformation projects.

This would include the construction of a total area of more than 44,000square metres for the establishment of a wine learning town in Xishui. The projection is expected to be completed in 2012.

According to Shanghai Securities News, Moutai annual sales will reach RMB571m (US$90m) posting profit of RMB288m (US$45m) this year.

A company spokesman said the the project would help expand the company’s market share in the Chinese rice wine market, which is facing competition from other alcoholic drinks such as red and white grape wine. Moutai is expecting sales of its chinese wine would reach 4mfour tonnes in 2015.

It is expected that the liquor industry in China will continue to push prices up, withthe Southern Metropolic Daily​ reported that Moutai has pushed its price by up to 30% with other players raising their prices by 40%.

Yellow Wine producer, Gu Yue Long Shan, has already announced new prices hiked by up to 14% in the new year. Other wine and beer companies are planning to follow suit.

Sales for Moutai’s young chinese wine contributes RMB20m million yuan, sales of red and white grape wine is less than RMB10m, beer sales standing at RMB600m yuan and healthy wine at RMB300m.

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