The liquor industry, hit by weak demand and stricter drinking policies, is experiencing an unusually sluggish peak season, now seemingly entering its "darkest hour." In Q3, multiple liquor companies reported their worst performance in nearly a decade, with both revenue and profits plunging significantly. Even industry leaders are struggling. Wuliangye Yibin, often dubbed the "eternal runner-up," delivered a shocking performance: while it posted growth in H1, its Q3 revenue and profits halved year-over-year. Among peers like Kweichow Moutai, Luzhou Laojiao, Shanxi Xinghuacun Fen Wine, and Yanghe Brewery, Wuliangye saw the steepest revenue drop, with its profit decline second only to Yanghe. Notably, Moutai still managed double-digit growth, while Shanxi Fen Wine maintained revenue growth.

Facing these challenges, liquor firms have resorted to "creative self-rescue" measures, such as controlling supply to stabilize prices, betting on low-alcohol products for new growth, or even replacing top executives. For instance, Yanghe’s former chairman Zhang Liandong resigned in July. Last year, Wuliangye also underwent leadership changes, with "post-70s" executive Hua Tao replacing Jiang Wenge as general manager. Has Wuliangye’s performance bottomed out? With Jiang’s departure, can Chairman Zeng Congqin retain his position?

**Worse Than Expected: Funds Exit Wuliangye** Wuliangye’s Q3 slump was anticipated. In mid-October, GF Securities predicted a 30% YoY revenue drop and a 45% net profit decline for Wuliangye in Q3 2025. However, the actual results were far worse: revenue fell 52.66% to RMB 8.17 billion, while net profit plummeted 65.62% to RMB 2.02 billion—its worst performance in two decades. The profit decline even exceeded the industry’s previous downturn in 2013–2014. For the first nine months, revenue shrank 10.26% to RMB 60.95 billion, and profits dropped 13.72% to RMB 21.51 billion, marking the first negative growth since 2015 and the lowest profit growth since 2016. Wuliangye attributed the slump to "deep industry adjustments and weaker-than-expected demand," while blaming profit declines on lower revenue and "increased market investments."

The steeper-than-expected profit drop reflects deteriorating gross margins, down 13.5% YoY, partly due to higher dealer subsidies and inventory buybacks. Despite these efforts, Wuliangye’s core product, the Eighth Generation, saw wholesale prices fall below ex-factory levels, with online retail prices hitting a 90-day low of under RMB 840 per bottle. Some consumers even reported prices below RMB 650 after discounts.

**Can Wuliangye Avoid Being Overtaken?** Amid price collapses, Wuliangye halted Eighth Generation shipments in January to stabilize prices, but the strategy failed to reverse the downtrend. Meanwhile, rival Luzhou Laojiao’s high-end Guojiao 1573 surpassed Wuliangye’s wholesale prices in Q2 2025, raising concerns about a potential "overtaking." GF Securities noted that frequent management changes at Wuliangye could give Luzhou Laojiao an edge.

Seeking new growth, Wuliangye launched a 29-degree low-alcohol product, "Yijian Qingxin," which reportedly surpassed RMB 100 million in sales within two months. However, competition is fierce, with rivals like Shedezizai, Gujing Gongjiu, and Yanghe also entering the low-alcohol segment. Consumer skepticism—such as complaints that low-alcohol products taste "watered-down"—adds uncertainty.

**Outlook: Gloomy and Under Pressure** With weak demand, ineffective price stabilization, and unproven new ventures, Wuliangye’s outlook remains bleak. Brokerages like GF and Wanlian have slashed 2025 profit forecasts. While Wuliangye’s "No. 2" position seems safe for now—given Luzhou Laojiao and Shanxi Fen Wine’s revenue gaps—Shanxi Fen Wine already surpassed Wuliangye in Q3 profits. If Chairman Zeng fails to turn the tide, the industry’s "Moutai-Wuliangye" duopoly could be reshaped.