Kweichow Moutai Co., the world’s second-largest distiller by market value, and other Chinese liquor makers fell in Shanghai and Shenzhen trading after the government asked them to stop raising prices.
Shares of Kweichow Moutai fell 3.8 percent to 190.10 yuan as of 1:54 p.m. in Shanghai, poised for its lowest close since June 27. Luzhou Laojiao Co. fell 7.1 percent to 38.85 yuan in Shenzhen, heading for its lowest close since Jan. 10.
Representatives from Kweichow Moutai, Wuliangye Yibin Co., Luzhou Laojiao and other distillers got the request not to raise prices in a Sept. 16 meeting with the National Development and Reform Commission, the China Alcoholic Drinks Industry Association said Sept. 19 on its website. China is aiming to control inflation that hit a three-year high in July.
“Considering recent inflation pressure, liquor products play a special role in stabilizing market consumption even though they are not staple consumer goods,” the drinks industry association said.
The request was meant to stop the sort of increases that Wuliangye, China’s largest liquor maker by sales, announced last month, when it said it would raise prices 20 percent to 30 percent starting Sept. 10. Kweichow Moutai may raise prices before Oct. 1, the 21st Century Business Herald reported Sept. 16, citing an unidentified person familiar with the situation.
Wuliangye fell 2.6 percent to 36.19 yuan in Shenzhen trading. Anhui Gujing Distillery Co. also slid 5.2 percent in Shenzhen to 53.10 yuan.
China’s consumer-price inflation slowed in August to 6.2 percent after reaching 6.5 percent in July, a three-year high.