China’s baijiu makers battle slump as New Year sales approach
China’s baijiu producers endured a sharp downturn in 2025 as cautious consumers cut spending amid economic uncertainty. Even market leaders are now rethinking their distribution and pricing strategies ahead of the crucial Lunar New Year period.
Western premium spirits producers endured a tough year in China in 2025, but they were not alone. The national drink, baijiu, also suffered from consumer wariness about prices and the state of the national economy.
Analysts estimate that the whole baijiu sector sales fell by nearly 15% last year, with the giant producers such as Kweichow Maotai, Wuliangye Yibin, Luzhou Laojiao, Yanghe, and Xinghuacun all taking big hits.
Profit pressure on smaller players
One of the smaller distillers, Kouzijiao, expects its net profit for 2025 to be between Y662m and Y828m (£70m to £88m), a slump of between of 50% and 60% on the 2024 outcome, which itself was less than half of the 2022 result.
Plummeting sales suggest a trend that the big groups want to reverse as the Year of the Horse gallops towards them in mid-February.
New year sales and strategy shifts
Chinese New Year is a major sales season for all spirits producers, and the biggest of them, Kweichow Moutai, is making big changes to how it does business, moving more of its sales to its own e-commerce platform iMoutai, including launching on it the coveted 500ml 53-degree Feitian Maotai (Flying Fairy).
Previously, only part of the range had been available on the site, but late last year, Maotai’s newly appointed chairman, Chen Hua, said the company would no longer use traditional distribution methods in 2026.
Distribution overhaul and inventory glut
Since 2018, Moutai has been seeking to take back more of its profits for itself by limiting outlets and trying to maintain price control.
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Distributor qualifications have been revoked, quotas have been reallocated to large supermarkets and e-commerce platforms, and the ‘iMoutai’ platform has been launched. But speculation and hoarding became widespread and prices plummeted as demand waned.
Industry data highlights strain
According to the ‘2025 Mid-term Research Report on China’s Liquor Market’ released by the China Alcoholic Drinks Association, in the first half of 2025, 58.1% of liquor companies reported increased channel inventory pressure, over half of distributors and retailers indicated an increase in the degree of price inversion, and more than 40% of retailers said they were facing cash flow pressures.
In the first three quarters of 2025, the total revenue of 20 A-share listed liquor companies amounted to Y317.79 billion, a year-on-year decrease of 5.90%; their combined net profit was Y122.571 billion, down 6.93%.
Inventory build-up and response
Despite the downturn in China’s alcohol consumption starting in 2022, most distillers continued to push stock into distributors’ warehouses, thus provoking the price cutting which culminated last year in declining volumes and prices.
By last autumn, trade statistics suggest that the industry’s average inventory turnover had climbed to 1,424 days, 65% above the 2024 level.
Consequently, producers have started to take action, suspending shipments, controlling inventory to stabilise prices, adjusting product structures to focus on mid-to-low-end products and diversifying into new categories.
Encouraging domestic demand, revitalising consumption, and pursuing high-quality development have become the main themes of this year.
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