With the release of Q3 financial reports by listed liquor companies, industry attention has converged on the impact of declining performance metrics. In the first three quarters of 2025, apart from a few companies like Kweichow Moutai Co.,Ltd. and Shanxi Xinghuacun Fen Wine Factory Co., Ltd., which maintained growth, the industry as a whole faced significant pressure. The previously observed trend of slowing growth and marginal declines has now transitioned into a sharp downturn this quarter. Against this sobering backdrop, the question arises: Are liquor companies still struggling in a counter-cyclical phase, or have they quietly hit bottom, awaiting a rebound?
01: Collective Slowdown in Q3 Reports The data reveals a stark divergence in the liquor industry’s performance during the first three quarters of 2025. Overall, the 20 A-share listed liquor companies reported combined revenue of 317.78 billion yuan, down 19.94 billion yuan year-on-year (YoY), and net profits attributable to shareholders of 122.57 billion yuan, a YoY decline of 9.13 billion yuan. Kweichow Moutai and Shanxi Xinghuacun Fen Wine Factory were the only two companies to achieve both revenue and profit growth, with revenue increases of 6.36% and 5%, and net profit growth of 6.25% and 0.48%, respectively. Meanwhile, multiple leading liquor companies saw growth come to a halt, ending years of sustained expansion.
Despite the industry-wide slowdown, the "strong get stronger" effect remains evident. The top six companies—Kweichow Moutai, Wuliangye, Shanxi Xinghuacun Fen Wine Factory, Luzhou Laojiao, Yanghe Brewery, and Gujing Distillery—accounted for 88.1% of total industry revenue (279.97 billion yuan) and 94.83% of total net profits (116.24 billion yuan). In 2024, these six firms represented 85.53% of revenue and 92.8% of profits, indicating further market concentration amid headwinds.
Regional liquor producers faced even steeper declines, with many hitting record lows. Companies like Kouzi Liquor and Jiugui Liquor saw revenue drop over 20%, while Shanghai Rocks Wine Co., Ltd. reported an 84.92% plunge. Net profits for Yingjia Distillery and Hengshui Laobaigan fell over 20%, with Kouzi Liquor, Yilite, and Tianyoude Liquor declining more than 40%. Jiugui Liquor and Huangtai Wine Industry suffered net profit drops of 117.32% and 131.5%, respectively, highlighting weaker resilience to market volatility.
The third quarter alone painted a grimmer picture. Only three companies—Kweichow Moutai, Jiugui Liquor, and Jinzhi Liquor—achieved double-digit revenue and profit growth. Eleven firms saw profits halved, with the median YoY net profit decline reaching 64.40%, underscoring acute profitability pressures.
02: An Expected Downturn Though the magnitude of the decline exceeded expectations, the outcome was anticipated. Since 2022, high channel inventories and price inversions have been brewing, setting the stage for this earnings slump. By Q3 2025, the average inventory turnover days for the 20 firms surged to 1,456.29 days, up over 60% from 868.03 days in 2024 and marking a record high since 2015.
Price systems also buckled under pressure. Premium liquor wholesale prices hit historic lows, with 53-degree Feitian Moutai loose bottles dropping to 1,640 yuan per bottle, down 28% from early 2025’s 2,300 yuan. Sub-premium brands fared worse, with Crystal Sword’s wholesale price at 405 yuan and Gujing Distillery’s Gu8 dipping below 200 yuan for the first time.
Facing these challenges, companies adopted "slowdown" strategies. Kweichow Moutai revised its growth target to 9% from 15%, while Wuliangye and Luzhou Laojiao emphasized "stability amid progress," collectively easing the burden on channels. Unlike past cycles driven by policy or financial shifts, this downturn stems from weak demand, inventory glut, and regulatory changes—a more complex scenario.
03: Is the Bottom Near? Since Q3 2024, the industry, markets, and investors have grappled with the reality of a liquor sector slowdown, seeking signs of a trough. Post-Q2 2025 earnings, Guotai Haitong Securities noted that policy shifts are accelerating industry consolidation, with a potential bottom by H1 2026. CITIC Securities post-Q3 suggested the sector is in its third major cycle trough since the 1990s, with fundamentals likely bottoming in Q3 2025 and a sales rebound possible by Q1 2026.
Valuations offer some solace. The sector’s average P/E ratio of 18x and Kweichow Moutai’s sub-20x P/E are near decade lows, providing a margin of safety. Historically, liquor cycles last 3–4 years; the current adjustment, beginning in 2023, may pivot by 2025–2026.
Demand-side headwinds, including alcohol restrictions, accelerated Q3’s decline, signaling faster industry cleansing. Notably, firms are proactively bolstering channel resilience. For instance, Zhenjiu launched its Dazhen product with a profit-sharing model to foster long-term partnerships, while Kweichow Moutai’s fall market survey covered 16 provinces and 300+ distributors to capitalize on holiday demand.
Analyst Xiao Zhuqing advises companies to adapt by refining product structures, optimizing channels, and balancing "extreme cost-performance" with cultural value. As China’s liquor market transitions toward rationalized consumption and structural下沉, innovation in branding and scenarios will be key.
While short-term pressures persist, liquor—a cultural and social staple in China—retains inherent demand. Strategic adjustments and product innovation could pave the way for a healthier post-adjustment phase.