This holiday season should be a joyous one for lovers of Moutai: the clear, potent spirit that is China’s most prestigious drink. With prices falling to their lowest in years, it’s an opportune time to stock up. But buyers should beware – the classic tipple is no longer such a solid investment.
That wasn’t always the case. Although not widely known or appreciated in the West, the sorghum-based liquor sold by Kweichow Moutai has a history inextricably intertwined with the rise of modern China.
With a lineage said to stretch back more than 400 years, the distillery is located in the picturesque river town of Maotai in the southwestern province of Guizhou. In 1935, Communist soldiers passing through on the Long March recalled cleaning their wounds with the local brew.
Mao Zedong used it to toast the founding of the People’s Republic in 1949. The drink was served to United States President Richard Nixon two decades later in Beijing, marking the end of China’s diplomatic isolation.
RISING WITH CHINA’S FORTUNES
As the country’s fortunes rose, so did Moutai’s. No longer a beverage for parched soldiers, the pricey bottles became status symbols ubiquitous at weddings, business dinners and state functions – culminating in a record market capitalisation of US$506 billion in February 2021. At the time, the distiller was worth much more than Coca-Cola or Toyota.
A 16-ounce bottle of the flagship Flying Fairy label cost about US$550 at its peak. Detractors may call it firewater, but admirers appreciate the 53 per cent alcohol for its smooth umami notes and long, spicy finish.
Families would hoard supplies for future celebrations, hoping they would appreciate in value. That wasn’t an outlandish idea when houses like Sotheby’s auctioned cases of old vintages for more than US$1 million.
But the Moutai stock’s two-decade bull run ended abruptly in 2021. That was deep into the banquet-free pandemic and about the same time Beijing decided to allow the property sector to collapse in favour of a new economic model centred around technological breakthroughs. Those industries, including chips and artificial intelligence, powered stock market gains in 2025.
Real estate, which once accounted for as much one-third of gross domestic product, became yesterday’s news. Because so much wealth was concentrated in property, consumption-related businesses began to lose their shine.
FALLING PRICES
The hangover is ongoing. Over the past four years, the Flying Fairy has gotten steadily cheaper. Earlier this month, it even dropped below the psychologically important wholesale level of 1,500 yuan (US$213) per bottle. That’s the lowest price in eight years. There was much debate online about what that means for such an iconic brand and the broader economy.
Nomura economists Jing Wang and Ting Lu have noted what appears to be a close correlation between the cost of Moutai and real estate. They theorise that both were once viewed as attractive choices for investment. But with the ongoing consumption malaise, each is experiencing too much inventory resulting in falling prices. Only one is a liquid asset.
There are also other factors at play. As I’ve written before, people in China are becoming more health- and fitness-oriented in the aftermath of the traumatic pandemic controls. Alcohol consumption is on the decline. It’s a global trend; Bloomberg Intelligence estimates that the US$1.8 trillion market is poised to slow in the new year and beyond.
It doesn’t help that the government renewed calls in May for local officials to cut spending on food and other expenses as part of a renewed austerity drive. The message makes sense given the parlous state of regional government finances, but doubtless dealt a blow to makers of baijiu, literally “white liquor” distilled from fermented grains.
WHAT’S NEXT
Given Moutai’s apparent correlation to property prices, could a future revival in real estate bring back the good times? Unfortunately, there isn’t happy news.
Larry Hu, an economist at Macquarie Group, says a 30 per cent overall export surge in 2021 is what gave the authorities the confidence to prick the property bubble. Overseas sales of goods continued growing in 2025, producing a surprise US$1 trillion trade surplus. That means policymakers are in no rush to launch stimulus measures for housing.
A weak property market implies continued affordable pricing for Moutai. That’s good news for its many fans.
After all, the spirit is more than an investment piece. It’s an integral part of the country’s cultural heritage – to be enjoyed in moderation, of course.