(Yicai Global) Jan. 27 -- Chinese top-shelf liquor brand Kweichow Moutai is cooperating with Shanghai’s market watchdog to crack down on sales of its baijiu at jacked-up prices. Moutai retailers in Shanghai will face confiscation and fines if they sell the company’s spirits for more than the designated CNY1,499 (USD231).

Many liquor stores and supermarkets have thus far withheld their stocks of Moutai from buyers' grasp, Beijing Business Today reported yesterday.

Demand for the fiery tipple has constantly grown as this year’s Chinese New Year nears. Supply shortfalls have led to steady hikes in prices of Moutai-branded liquor in the end market. The price per bottle has already risen to as high as CNY2,500 in the current market -- even topping CNY3,000 in some regions.

Moutai’s limited production combined with huge market demand have opened a rift between suppliers and buyers that has not only caused sellers to hoard and resort to marketing hype, but also unleashed market disorder because of counterfeiting, issues the liquor maker has had to deal with in recent years, the report added.

Moutai shares [SHA:600519] have repeatedly set new records lately. Its stock closed 1.68 percent down at CNY2,106 after opening at CNY2,141.89 today after rising to CNY2,187 (USD338.4) yesterday from CNY1,939 on Dec. 31.

The company’s brand value jumped 63 percent to CNY1.04 trillion (USD161 billion) last year, the Hurun Most Valuable China Brands 2020 shows, Yicai Global reported on Jan. 21.

Distilled from a mash of sorghum, the spirit is named after the town of the same name near Zunyi in China’s rugged southwestern Guizhou province, where distilling has a very long history. Today's Moutai, which originated during the Qing dynasty, came into international prominence after winning a gold medal at the Panama-Pacific Exposition in San Francisco in 1915.

The sought-after liquor is served at China's feasts with foreign heads of state and other distinguished guests. Zhou Enlai famously regaled US President Richard Nixon during the banquet for the latter's state visit to China in 1972 with this the country's official baijiu.

Editor: Ben Armour, Xiao Yi