Chinese liquor companies’ stock prices have continued to tumble since October despite positive third-quarter results.

China-Singapore Jingwei reported that share prices of Chinese liquor giant Kweichow Moutai on October 28 dropped below the $193 (1,400 yuan) mark twice and closed at $187.50, indicating an all-time low since the end of June.

As of October 26, the distiller logged a 21.81% drop after 13 trading days, wiping nearly $71 billion in market value.

Net Ease explained that the decline in Moutai’s stock prices was mainly due to the continuous sale of northbound funds, also known as Hong Kong-domiciled funds in China. 

Since October, total net sales of Kweichow Moutai stock have reached nearly $2.2 billion.

In addition, Da Ji Yuan noted another reason was that the stringent “zero-COVID” policy also hampers the catering sector, which has the highest demand for liquor. 

The communist regime ordered all Chinese citizens to celebrate the week-long National Day holidays at home in the first week of October. As a result, domestic tourism revenues and tourist trips across China over the seven days fell sharply from last year. This, in turn, also undermined other sectors, including catering.

The outlet, citing Economic Observers, reported that Gujing Tribute Liquor, one of China’s top distillers, erased more than $1.7 billion on October 17, marking the most significant single-day loss in 16 months. 

Recently, the Chinese Ministry of Finance has ordered all companies to strictly tighten budgets and cut down on extravagant yearly spending.

And this is what makes industry insiders think was the cause of the fall in China’s liquor stock prices.   

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