China's major liquor producers have started raising prices to cash in on demand during the upcoming Spring Festival celebrations.

Kweichow Moutai, a famous spirit company in China's southwestern Guizhou Province, announced recently that it would increase the producer prices of its various spirits by 20 percent on average.

The company said the price increase was a natural response to the rising market demand.

Liquor is considered a must-have for Chinese families gathering for the coming Spring Festival, which this year is on February 7, the country's traditional Lunar New Year, which usually drives up the prices.

The current producer price of a bottle of 53-degree Moutai was 388 yuan (53 U.S. dollars), and its sales price had already surged before the company's announcement, according to a recent report by the Beijing Morning Post.

The sales price of 53-degree Moutai had increased from 688 yuan (94 U.S. dollars) to 728 yuan (100 U.S. dollars) a bottle at one of the company's chain stores in Beijing's Xizhimen area, the report said.

Rising grain costs have also impelled the liquor producers to increase prices, analysts said.

(Xinhua News Agency January 16, 2008)