Luzhou Laojiao discusses volume and price strategies: The pricing system of a mature brand should not fluctuate with short-term changes in competitors.

Recently, Luzhou Laojiao released an investor relations management information announcement. It disclosed that in recent years, more and more young consumers have been favoring drinking low-alcohol baijiu; low-alcoholization is one of the development trends of Chinese baijiu. We hope more baijiu companies will participate in R&D and market expansion for low-alcohol products, and work together to grow the industry’s “market pie.”

As a leading company that moved early and has focused deeply on the low-alcohol liquor segment, the company’s core advantages are concentrated in three areas: first, it has established a solid technological moat, and through long-term technological accumulation has achieved a core breakthrough in the quality and flavor profile of low-alcohol liquor; second, it adheres to the traditional “single-grain” brewing process, with a purer, richer mouthfeel; the product’s quality stability has been thoroughly tested by the market over time, forming a differentiated competitive barrier; third, market validation is robust. The recognition of low-alcohol products in key regions such as North China, East China, Southwest China, and more emerging markets has continued to rise, fully demonstrating consumers’ affection for the company’s low-alcohol products.

Based on the characteristics of young groups’ “self-pleasure” consumption needs and their demand for emotional value, the company steadily advances the national rollout of low-alcohol products, with product innovation as the core, scenario fit as the carrier, and emotional resonance as the bond, continuously leading the low-alcohol baijiu track.

Regarding volume-and-price strategy, the announcement states that the brand positioning of Guojiao 1573 is a strategic choice the company makes by standing on its long-term brand value and making decisions based on market rules. The core logic is as follows: First, historical experience lays the foundation for strategic resolve. From the company’s development experience, the price system of mature brands cannot swing due to short-term fluctuations from competing products; especially for high-end brands, maintaining strategic firmness is necessary to protect the brand’s long-term vitality.

Second, brand value and user needs determine pricing logic. The core consumer group for baijiu values brand identity and value stability. Guojiao 1573 has scarce production capacity and excellent quality; in this round of industry adjustment, its price plate remains stable, which is a reasonable reflection consistent with brand positioning and market expectations.

Third, respond with differentiation rather than simply “protecting the price.” The company needs to create more added value for users through improving service quality and optimizing the consumption experience, so as to respond to market changes. The company will continue to adhere to its brand positioning, strengthen brand value delivery and upgrade user services, and protect Guojiao 1573’s brand assets from a long-termist perspective.

(Company announcement)