Climbing down the Moutai: Is the prestigious Moutai brand crumbling under China's anti-extravagance campaign and economic turmoil?

Beijing: Outside China, Moutai has little resonance. Within it, the brand is a behemoth that bestrides banquets and presides over the gift-giving economy. China's most prestigious baijiu, a fiery spirit distilled from sorghum, is a token of status, instrument of political patronage, and barometer of the country's economic fortunes.

Like Champagne, Moutai carries a geographical indication (GI): only spirit made in a protected zone of about 15 sq km in Maotai town, using Chishui river water and matured for years in clay jars, may carry the name. ('Moutai' is the older romanisation of 'Maotai'.) That exclusivity has helped make it the world's most valuable liquor company, worth about $250 bn.

In Maotai, a rich town in poorer Guizhou province, the air is saturated with the smell of fermenting sorghum, and the streets are crammed with shops selling baijiu in every bottle. Steel vats of spirit line the road like grain silos, plastered with stickers for distilling equipment. Dominating the landscape, Kweichow Moutai distillery has its own Mount Rushmore at the entrance: a frieze of China's communist pantheon, including Mao and Deng, smiling approvingly, cups raised.


Communist Party's relationship with Moutai is long and well exploited. Legend has Red Army soldiers in 1935 dabbing it on wounds and drinking it against the cold. In the early 1950s, the state folded the town's private distilleries into one enterprise: liquor of the guerrilla retreat had become liquor of the new state. In 1972, Zhou Enlai toasted Richard Nixon with it.

Moutai's fortunes have been a weathervane for China's political winds. In the 2000s, with the economy whooshing along at double-digit rates, it entered its golden age, a product scarce by design, prestigious by reputation, and indispensable at any table where government or business was done.

Then came Moutai Shock 1.0. In late 2012, as Xi Jinping took power, a sweeping campaign against corruption and official extravagance turned a routine ritual into a political risk. A bottle of Moutai on the banquet table now spoke of excess and possible graft. Demand from government departments and state-owned enterprises plunged: profit growth, 52% in 2012, fell to 14% in 2013, and about 1% by 2015.

Yet, the baijiu proved resilient. The company turned to private buyers: affluent households, privately funded business entertaining and weddings. It could count on the scarcity of a spirit that takes 5 yrs to make. Moutai became a luxury investment, with collectors and speculators buying bottles to hold, age, or flip. By 2020, shops in Beijing were asking more than ¥3,000 for a bottle Moutai itself priced at ¥1,499.

But this being China, nothing stands still for long. Enter Moutai Shock 2.0.

I visit Wang Gong Guan distillery, a small-to-medium operation up a hill from the Chishui. The general manager takes me round, explaining the science of distilling with real passion. In the packaging hall, the filling machine, whose sign proclaims it fully automatic, is still, a single bottle on the belt beside it as if the line had stopped mid-shift. In the storeroom, rows of dark clay jars capped in red cloth are greyed with dust.

The place is strangely quiet: no workers, idle machines. It is the last day of the national holiday, so I assume the factory is on a break, and ask if I can return tomorrow. The manager looks confused, then laughs. No, no, he says. They stopped all production at the start of the year and are only selling what's in stock.

Wang Gong Guan is not alone. Data from Tianyancha, a commercial company records platform, show 477 distilleries and liquor-trading firms deregistered in Maotai town in 2023, up 45%, and 255 in the first 4 mths of 2024.

Moutai itself is hurting. In 2025, it reported its first simultaneous fall in revenue and profit since listing in 2001, the street price of a bottle has fallen more than 40% from its 2020 peak, to about ¥1,700 ($250), and its market value is down by more than a third in 5   yrs. At least 16 senior executives have been investigated since 2019, among them 3 former chairmen. But corporate governance is only part of the story.

A prolonged slump, underpinned by a collapse in property prices, has eroded household wealth and confidence. For years, property was the principal store of that wealth, and rising prices fed a culture of spending on status goods. Now, consumers are cautious, businesses watch expenses, and local governments are short of money. Beijing has renewed its war on official extravagance: in May 2025, it banned alcohol at official meals. The fact that even Moutai, with all its inherited prestige, is struggling is telling.

That evening, I have dinner with Zhou, a small producer who once used the distillery to package his baijiu, Zhutai. Beijing's disapproval of indulgence has yet to percolate down here. There are too many dishes to count. Or perhaps the abundance is an effect of seeing double, so much toasting has there been.

Zhou waxes lyrical about baijiu's health benefits. 'Look at me,' he says, sweat pouring down his flushed cheeks, belly wobbling over his belt. 'Can you imagine I'm 60?' In fact, I can. But this is Maotai, and there is only one appropriate response: to drain my cup.