1/ Post pandemic, the growth rate of various food consumption products did not meet the expected rapid increase. Additionally, government consumption is strictly limited, reducing the scenarios that support alcohol consumption, leading to insufficient effective market demand.
2/ Under the guidance of leading brands like Moutai directly increasing sales volumes and strictly controlling retail price hikes, the price increase room for high-end to sub-high-end products has been compressed, and the main business revenue and profitability of well-known products have declined.
3/ Key enterprises and traditional key production areas continue to expand brewing facility construction, and the production capacity of solid-state raw liquor is gradually being released. Inventories of raw liquor and finished liquor continue to increase.
4/ Well-known brands are accelerating their expansion to broader sales regions and nationwide layouts, penetrating into third- and fourth-tier markets and through omni-channel, both online and offline. The regional brands’ baijiu market has visibly shrunk.
5/ After the revised standards for beverage alcohol classification and baijiu industrial terminology were issued, they affected the raw materials of liquid baijiu. The labeling of food tags has increased the cost of some low-end baijiu.
6/ The adjustment of the national industrial structure catalog lifted restrictions on baijiu production lines. Various regions, especially traditional baijiu-producing areas, have successively approved the establishment of a number of new baijiu enterprises, leading to a slight increase in the total number of baijiu enterprises. However, due to the current macroeconomic environment, the number of large-scale baijiu enterprises has not increased but decreased. We have now entered an era where there is neither a shortage of alcohol nor a shortage of good alcohol.
see the other post for Chinese Baijiu consumption – already quite high volume, hard to grow, likely decline IMO.