Sou Hu Cai Jing·2025-11-30 14:09Core Insights - The Chinese liquor industry is facing a significant downturn, with total revenue for twenty listed companies dropping by 18% year-on-year and profits plummeting by 22% in the third quarter of 2025, indicating a harsh industry winter [1][3]. Group 1: Industry Performance - Eighteen companies reported revenue declines, with industry leader Kweichow Moutai barely maintaining a 0.5% growth rate, marking a ten-year low, while Wuliangye's revenue nearly halved and Yanghe incurred a loss of 370 million yuan [3]. - The top six companies, including Moutai and Wuliangye, accounted for 88.22% of total revenue among eighteen liquor companies, highlighting a growing "Matthew Effect" where larger firms are better able to withstand economic pressures [3][5]. Group 2: Market Dynamics - The price segment is increasingly polarized, with Moutai and Wuliangye dominating the over 500 yuan price range, while the 300 to 500 yuan segment faces significant pressure from both high-end and regional competitors [3]. - The main consumer demographic for liquor has decreased by 28 million, with the 30 to 55 age group shrinking and younger consumers showing less interest, as liquor only accounts for 13% of their beverage choices [5]. Group 3: Structural Changes - The current downturn is attributed to structural changes rather than cyclical fluctuations, influenced by the real estate downturn and an aging population, with the traditional drinking culture being rejected by younger generations [5][7]. - The new regulations prohibiting alcohol at official dining events have led to a sharp decline in high-end dining revenues, with some areas experiencing a 70% drop in sales [5]. Group 4: Financial Health of Distributors - Distributors are facing tougher conditions, with gross margins declining from 20-23% in 2019 to 15-17% in 2024, and net profits dropping from 8% to 3-5%, leading to a situation where discounting and loss-making operations have become the norm [7]. - The global trend of declining alcohol consumption has resulted in a loss of approximately 830 billion USD in market value for major alcohol companies over the past four years, indicating a long-term shift in consumer behavior [7].