MAOTAI, China — If history is indeed written by the victors, then this isolated mountain hamlet in southern Guizhou Province hit the jackpot when Red Army soldiers sought refuge here in the spring of 1935. Exhausted by their long-distance retreat from Nationalist forces, Mao’s guerrillas used the town’s bracing 144-proof liquor to disinfect wounds, tame diarrhea and take the edge off their jangled nerves.

“The Long March was a success in large part due to Maotai,” the rebel commander Zhou Enlai later told historians. In 1949, after becoming prime minister of the newly established People’s Republic, Mr. Zhou designated the sorghum-based liquor, called Moutai, China’s “national wine,” giving it an undeniable marketing edge over the other gullet-searing grain spirits, collectively known as baijiu, tossed back at banquet tables across the nation.

But when the retail price hit nearly $200 a bottle last month, a 50 percent increase over two years, Chinese drinkers erupted in outrage, accusing the state-owned distillery of discarding its revolutionary roots to gouge the little guy. It did not help when media reports revealed that the same bottle sold for half that much in the United States and Europe.

“I hear most of it gets delivered to Zhongnanhai,” said Wang Yonghui, 32, a bank teller and baijiu aficionado, referring to the Beijing compound that houses the country’s top leaders. “We pay more, and they get it for free.”...