The baijiu industry is facing its darkest hour in 2025. Last year, the 19 listed baijiu companies achieved a combined operating revenue of 361.81 billion yuan, a year-on-year decrease of 18.13%. Their combined net profit attributable to shareholders was 126.632 billion yuan, a year-on-year decline of 24.1%. In this industry-wide adjustment, no company has been spared. Last year, the revenue of 18 listed baijiu companies declined; only Shanxi Xinghuacun Fen Wine Factory Co.,Ltd. saw revenue growth. The net profit of 17 listed baijiu companies fell last year; only Jinzhongzi Liquor and Shanxi Xinghuacun Fen Wine Factory Co.,Ltd. reported growth. In the first quarter of this year, the vast majority of liquor companies continued to experience declines. The main reason for this phenomenon is that the past growth model, which relied on pushing inventory into sales channels to maintain prosperity, has reached its end. In June 2025, a mid-term research report on the Chinese baijiu market jointly released by the China Alcoholic Drinks Association and KPMG indicated that "distributors are generally facing inventory pressure, with some experiencing extended inventory cycles, and price inversion in the market is widespread. This has made it difficult for distributors to manage cash flow, leading them to become more cautious about subsequent purchases." Since 2024, liquor companies have used price adjustments to address inventory pressure. In 2025, leading liquor companies have frequently implemented measures to control supply and stabilize prices. Weak terminal consumption, slowing market sales, and reduced willingness among distributors to make payments have formed a negative feedback loop. When will the baijiu industry reach its inflection point?
Inventory Increases, Inventory Turnover Days Lengthen Compared to other industries, the "inventory" in the baijiu sector is unique. High-quality base liquor does not expire; instead, its value appreciates over time. However, as the industry enters a deep adjustment phase, channel inventory issues have surfaced, necessitating a re-evaluation of liquor companies' inventory. Last year, the total inventory of the 19 listed baijiu companies reached 185.802 billion yuan, an increase of nearly 11% year-on-year. Seventeen companies saw inventory growth, accounting for 89% of the total. Kweichow Moutai Co.,Ltd. saw an increase of 7.084 billion yuan, Luzhou Laojiao increased by 2.003 billion yuan, and Wuliangye increased by 1.832 billion yuan, ranking top three. In the first quarter of this year, inventory continued to grow for the vast majority of liquor companies. Simultaneously, inventory turnover days have generally increased, rising from 854 days in 2024 to 1,130 days. Among them, Wuliangye's inventory turnover days increased by 141.7%, ranking first. This was followed by Shuijingfang, with an increase of 84.75%. Additionally, Yilite, Gujing Gongjiu, and Yanghe saw increases exceeding 40%. The significant increase in inventory turnover days reflects the industry-wide dilemma of "slow shipments and high stockpiling." The essence lies in the dual pressures of channel confidence and consumer demand. On one hand, distributors are cautious about market expectations, reducing their stockpiling, which slows the outflow of finished products from companies. On the other hand, weak terminal consumption makes it difficult for channel inventory to be digested by end consumers, which in turn negatively impacts corporate inventory turnover.
Distributor Payment Enthusiasm Declines; Contract Liabilities Plunge Sharply at Yanghe, Shanxi Fenjiu, and Kweichow Moutai Channel inventory is the core issue facing the baijiu industry in 2025. Against the backdrop of shrinking terminal demand, distributors are under significant pressure. Contract liabilities serve as a reservoir for baijiu companies and are an important indicator of distributors' willingness to make advance payments. In 2025, 15 of the 19 listed baijiu companies experienced a contraction in contract liabilities. Gujing Gongjiu saw a sharp decrease of 56.76%, Kouzi Cellar's contract liabilities fell by 40.26%, and Jiuguijiu decreased by 28.46%, making them the companies with the most severe declines. Generally, leading liquor companies have greater bargaining power relative to distributors, and their larger contract liability scale better reflects distributor payment enthusiasm. Among the leading firms, Yanghe's contract liabilities decreased by 27.21%, Shanxi Xinghuacun Fen Wine Factory Co.,Ltd. fell by 19.21%, Kweichow Moutai Co.,Ltd. dropped by 16.53%, and Luzhou Laojiao declined by 15.35%.
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