Analysis of the Impact of Moutai's Supply Contraction Policies on Inventory and Prices, and Its Investment Value

1. Policy Combination of Shipment Halt + Quota Tightening
   : Moutai has issued a notice to immediately suspend the distribution of all products to dealers (prepayment has been completed). The suspension period is expected to last until January 1, 2026, and will only be resumed if the market’s resilience is judged to have recovered around the Spring Festival. This measure clearly aims to address the year-end capital and inventory pressure, preventing dealers from being forced to sell at low prices due to tight capital chains, which could trigger a collapse of the price system [1].
2. Significant Reduction in Supply of Non-Standard Products
   : In 2026, the focus will be on three main products: Feitian Moutai, Moutai 1935, and Premium Moutai. Original non-core products will be gradually phased out: Moutai 15-Year, 1L Feitian, Zodiac Moutai, and Colored Glaze Treasure will be reduced by 30%, 30%, 50%, and 100% respectively. The intention is to reduce low-profit, high-overstock products from the source, optimizing the distribution structure through ‘reducing inventory and improving quality’ [1]. At the same time, dealers whose shipment price is below 1650 yuan per bottle will be disqualified, forming a double constraint of price red line and channel cleaning [2].

1. Mechanism to Alleviate Inventory Pressure
   : Currently, dealers face the situation of existing inventory and continuous pressure to take goods, with highly tight cash flow. Some major dealers have already taken actions such as ‘selling at a loss’ or ‘suspending purchases’, and the negative feedback between channel inventory and prices is obvious [3][4]. Supply-side contraction releases a ‘deleveraging’ window for the market by halting shipments, reducing new inventory at the end of the year, and along with the withdrawal of non-standard varieties, reducing dealers’ psychological resistance to continuing to accept new goods under high inventory. This is expected to accelerate inventory turnover (from the industry level, the inventory turnover days of liquor companies have been extended to more than 900 days; supply contraction helps to bring the inventory cycle back to a reasonable range) [3][4].
2. Stable Expectation of Price System
   : Currently, Feitian Moutai has fallen below the official guide price of 1499 yuan in some channels, and dealers’ profit line is approaching 1600 yuan per bottle. Coupled with the price inversion of allocated goods, dealers’ profits are further eroded [3]. Supply contraction means a reduction in available goods in the circulation end; after quota tightening, it can suppress further price decline in the short to medium term. Combined with the disqualification of low-price shipments, it helps to restore prices to the ‘official guide price +’ range and maintain brand scarcity [1][2].

1. Structural Adjustment is Conducive to the End of Destocking
   : By reducing non-standard product allocations, Moutai will enable the channel side to ‘only prepare core products and less fancy ones’, avoiding the old model of ‘over-reliance on allocation for high-priced product atmosphere’. If this is combined with the shipment halt window, allowing manufacturers and dealers to form a rhythm of ‘joint destocking’, the inventory digestion speed can be significantly improved.
2. Channel Unbinding + Cash Flow Relief
   : During the shipment halt period, dealers no longer need to continue paying prepayments; the released cash can be used to clear existing inventory, thereby reducing panic selling caused by tight capital chains. Allocation restrictions also allow channels to refocus on product combinations with high profits and fast turnover.
3. Short-Term Risks Remain
   : If demand has not really recovered, the price rebound caused by supply contraction may be unstable; small and medium-sized dealers still face the risk of ‘not being able to sell’. The supply-demand rebalancing cycle needs to observe sales verification and inventory reduction data after the Spring Festival peak season.

1. Sound Fundamentals
   : Moutai’s current market value is about 1.78 trillion yuan, P/E ratio is about 19.8, ROE exceeds 36%, and operating cash flow and profit margins are stable [0]. Its ‘high dividend + scarce supply’ attributes still have long-term appeal.
2. Is the Valuation Reasonable?
   : Although the stock price has fallen by about 6.7% since the beginning of the year, the current price is fluctuating around the 20/50/200-day moving averages. In the short term, it is necessary to continue observing volume cooperation and whether the price can hold the 1400 yuan integer mark [0].
3. Supply Contraction Boosts Defensive Characteristics
   : The structural reform aims to reshape the combination of ‘non-standard products - low sales - high inventory’, thereby protecting the value of core Feitian and brand premium. If this strategy is implemented, Moutai will once again reflect the characteristics of ‘high-end defense + growth certainty’ in the liquor industry, supporting its long-term investment positioning of exchanging high valuation for low risk.

1. Strategy Judgment
   : Against the background of high channel inventory and price breakdown, supply-side contraction (shipment halt + non-standard quota reduction + price red line) is expected to accelerate inventory destocking, stabilize the price system, and strengthen the scarcity of core products, which is helpful for bottoming in the short term.
2. Focus Points
   :
   • Whether the digestion of dealer terminals rebounds after the Spring Festival; if sales are still weak, it indicates that demand has not been substantially repaired, which will limit the price rebound space.
   • Data on dealers’ cash flow and inventory reduction, which are key indicators to judge when supply-demand balance will be fully restored.
3. Investment Recommendations
   : Considering the company’s cash flow and brand moat, under the promotion of supply-side reform, if the price remains in the range of 1650 yuan + and inventory continues to decline, it can be moderately allocated as an object of ‘exchanging valuation for safety margin’; if supply and demand still do not improve, it is necessary to wait for confirmation of inventory digestion before increasing positions. It is recommended to start an in-depth research mode to obtain detailed indicators such as dealer inventory, channel distribution, and consumer-side sales, to further verify the actual effect of supply contraction.

[0] Jinling API Data (Guizhou Moutai’s Latest Market Situation, Company Overview, Financial Analysis, Daily Line Statistics)
[1] Tencent News - “From 1490 yuan to 1580 yuan in just 24 hours! Has Moutai’s shipment halt and price control taken effect?” (https://news.qq.com/rain/a/20251215A03QZC00)
[2] Securities Times - “Dealers selling below 1650 yuan will be disqualified? Moutai: False” (https://www.stcn.com/article/detail/3542068.html)
[3] 36Kr - “Falling below 1499 yuan, even Moutai can’t be sold” (https://m.36kr.com/p/3585007030434953)
[4] East Money - “Losing millions on a ton of goods, liquor dealers ‘bleed’ through the winter” (https://caifuhao.eastmoney.com/news/20251204102348621077870)
[5] China Industry News - “Moutai and Wuliangye ‘drop prices’ How does the liquor industry go through the super-long cycle?” (https://www.cinn.cn/yc/2025/12-13/MDZmNZ3r.html)