Sichuan Swellfun Co.,Ltd. has issued a circular to all distributors, retail outlets, and partners on July 1st, focusing on strengthening channel management across three key areas: combating cross-region product diversion, safeguarding reasonable channel profits, and driving growth through genuine sales.
According to the circular, the company will leverage its product traceability system and comprehensive inspection mechanisms to crack down on cross-region diversion, implementing tiered disciplinary measures for verified violations.
To protect channel interests, the firm will optimize product release schedules and continuously monitor inventory levels to mitigate risks at their source.
Marketing strategies will be further adjusted to foster healthy growth driven by actual consumption.
Ongoing support initiatives, including promotions for opening bottles, tastings, and banquets, will be pushed to help partners accelerate inventory turnover, solidify the consumer base, and guide steady business growth.
This wave of channel rectification policies is directly linked to the deep adjustment cycle the baijiu industry is currently navigating.
Since the industry entered a downturn in 2022, high social inventory, sluggish demand recovery, and widespread price inversions have become common challenges.
Inventory pressure is particularly acute in the sub-premium price segment.
Amid this supply-demand imbalance, frequent incidents of cross-region diversion and discounted dumping further disrupt pricing systems, squeeze channel profits, and create a vicious cycle of inventory buildup, price slashing, price inversion, and slower sales.
As a representative player in the sub-premium baijiu segment, Sichuan Swellfun Co.,Ltd. has faced significant pressure during this industry adjustment.
Financial reports show the company achieved operating revenue of 3.038 billion yuan in 2025, a year-on-year decrease of 41.77%, with net profit attributable to shareholders at 406 million yuan, down 69.73% year-on-year.
Behind this sharp decline lie both external factors like overall weak industry demand and internal issues such as earlier channel inventory buildup and a loosening price structure.
Against this backdrop, repairing channel relationships and rebuilding distributor confidence have become top priorities for the new management team.
The company's annual general meeting on June 30th indicated signs of marginal improvement in sales momentum.
Reflected in the financials, first-quarter revenue showed an 18% sequential increase, with net profit surging 114.13% quarter-on-quarter.
However, on a year-on-year basis, both revenue and net profit for the first quarter still experienced double-digit declines.
It is important to note that restoring channel order is a long-term process, and whether sales momentum can be sustained ultimately depends on the broader consumer environment.
For Sichuan Swellfun Co.,Ltd. navigating this adjustment period, strengthening the channel foundation and rationalizing the pricing system represent the most prudent course of action.
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