In the third quarter, Wuliangye Yibin Co., Ltd. (000858.SZ) reported a staggering 52.66% drop in revenue and a 65.62% plunge in net profit. While the dismal earnings are alarming, the bigger concern is the sharp decline in prices of its core product, the eighth-generation "Pu Wu," now available for as low as 640 yuan per bottle on e-commerce platforms.

Amid the "Double 11" shopping festival and the release of its Q3 results, Wuliangye is grappling with both financial and pricing pressures. The company's Q3 revenue stood at just 8.174 billion yuan, down 52.66% year-on-year, while net profit attributable to shareholders plummeted 65.62% to 2.019 billion yuan.

Despite holding over 130 billion yuan in cash reserves, Wuliangye's immediate challenge lies in stabilizing the price of its flagship product. During the "Double 11" promotions, prices for the eighth-generation Pu Wu have taken another hit across major e-commerce platforms like Pinduoduo, JD.com, Taobao, and Douyin. On JD.com, some consumers secured bottles for just 640 yuan—far below typical retail levels.

Following the earnings shock, Wuliangye hastily announced a 10-billion-yuan dividend to appease investors, temporarily steadying its stock price. However, the timeline for price stabilization remains uncertain.

**Price Collapse Accelerates** Even before the Q3 report, wholesale prices for Pu Wu had begun crumbling. Data from "Today's Liquor Prices" shows the wholesale price fell from 930 yuan/bottle in July to 855 yuan by November 6—a 10% drop since June.

E-commerce promotions have exacerbated the decline. During this year’s "618" festival, Pu Wu prices dipped to 756 yuan/bottle with stacked discounts. Now, "Double 11" has driven prices even lower: Pinduoduo offers bottles at 739 yuan, JD.com and Taobao at 840–850 yuan, and Douyin under 750 yuan. Some JD.com users reported securing bottles for 640 yuan after applying multiple coupons.

Analysts warn these steep online discounts are eroding margins for offline distributors and destabilizing Wuliangye’s carefully curated pricing hierarchy. Guotai Junan Securities notes Pu Wu’s actual selling price has fallen nearly 100 yuan this year, squeezing distributors.

**Limited Countermeasures** Wuliangye has attempted to defend prices by cutting 2024 distributor quotas by 20% and recalling sub-900-yuan inventory to count toward 2025 allocations. It also piloted direct-to-retail distribution in 20 cities to tighten control.

While these measures briefly lifted wholesale prices to 950–960 yuan early this year, the gains proved fleeting. Despite frequent policy adjustments, consumers continue flocking to cheaper online channels—even at the risk of counterfeit products.

The company’s enforcement has weakened recently. Whereas it previously penalized platforms like JD.com for unauthorized discounts (deducting 3.65 million yuan in 2022), it now resorts mainly to public warnings. Before "Double 11," Wuliangye blacklisted 46 unauthorized online stores but failed to curb price erosion.

**Distributors Under Siege** With channel inventories ballooning to 5–6 months (versus the healthy 2–3 months), distributors face mounting cash flow pressures. Many are exiting: Wuliangye’s distributor count fell by 124 in H1 2025.

The strain is evident in Wuliangye’s financials. Contract liabilities (advance payments from distributors) dropped to 9.268 billion yuan at Q3-end, marking three consecutive quarterly declines—a sign of weakening distributor confidence.

**Industry-Wide Downturn** The liquor sector’s downturn, which began in 2022, has now reached a critical phase. Even Kweichow Moutai saw near-flat growth, while some peers reported triple-digit profit declines.

Analysts believe the industry is bottoming out, with Q3 2025 likely representing the trough. Pacific Securities forecasts Wuliangye’s net profit will shrink 16.2% this year before modest rebounds in 2026–2027. CITIC Securities suggests a recovery may not emerge until Q1 2026.

For Wuliangye and its distributors, the winter of discontent is far from over.