Maotai Millions: Prices Rise for China’s National Spirit

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(L-R) US President Richard Nixon and Chinese Premier Chou Enlai toasting with maotai while dining in Great Hall of People, during Nixon's trip to China.

It’s true the world over. Take booze away and people will get upset. Rising prices for Maotai, the “national spirit” of China, had the normally tame Chinese National People’s Congress getting a little raucous earlier this month.

A 20% rise in prices added a bit of spice to the usual self-congratulatory affair, with one lawmaker proposing the government step in and put a price ceiling on the fiery liquor so favored by communist leaders of now and yore.

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Maotai is brewed in a remote part of Guizhou, in southwestern China, and the increased cost of the raw material for the drink – water, sorghum and grain – coupled with increased demand for the luxury good as China’s affluent population grows, makes it unlikely prices will come down anytime soon.

“Maotai’s production requires special techniques and is closely connected with the area’s special environment. It’s not possible for them to ramp up production and market supply in a short period of time,” said Guizhou provincial governor Zhao Kezhi.

Kweichow Moutai, the company behind the fiery drink, posted net profits of 4.17 billion yuan ($634.9 million) during the first three months of 2010. While in February, over a hundred bottles of Maotai sold for 5.22 million yuan ($791,000) at a liquor auction in Shanghai.

Maotai is considered China’s top brand and a major status symbol, and is the drink of choice at many state functions, with Chinese leaders toasting dignitaries such as Richard Nixon, Kim Il-sung, Margaret Thatcher and Ho Chi Minh, and the birth of the People’s Republic of China. (via Reuters and Xinhua)

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