Core Viewpoint - The ongoing suspension of sales by major liquor companies, such as Sichuan Tuopai Shede and Shui Jing Fang, reflects a broader effort to stabilize pricing and address the issues of excessive inventory and price wars in the Chinese liquor industry [1][2][4]. Group 1: Company Actions - Sichuan Tuopai Shede announced a suspension of orders for its core product, Tuopai Tequ 2.0, effective July 10, with a date for resuming orders to be announced later [1]. - Shui Jing Fang implemented a full-channel suspension of its core product, Zhen Niang Ba Hao, and is tightening control over e-commerce channels to enforce pricing policies [1][2]. - Shui Jing Fang has taken strict measures against violations, including fines and termination of partnerships, to combat cross-regional sales and maintain pricing integrity [1]. Group 2: Industry Context - The liquor industry is experiencing unprecedented inventory pressure, with a shift in consumer drinking habits leading to increased market segmentation [4]. - Major liquor companies, including Wuliangye and Luzhou Laojiao, have adopted similar suspension measures to stabilize prices, indicating a collective industry response to the challenges faced [4]. - The high-end liquor market is seeing price fluctuations, while competition in the mid-range segment is intensifying, prompting companies to shift from a "channel pressure" model to a "sales-driven" approach [5]. Group 3: Future Outlook - The effectiveness of the suspension measures remains uncertain, as reducing market supply may alleviate downward price pressure but does not address the underlying inventory issues [5]. - The long-term recovery of the liquor industry hinges on restoring consumer confidence, balancing manufacturer interests, and optimizing product structures [5]. - The industry faces the challenge of achieving a smooth transition during this adjustment period while seeking new growth drivers [5].

Core Viewpoint - The ongoing suspension of sales by major liquor companies, including Sichuan Tuopai Shede and Shui Jing Fang, reflects a strategic response to the intense price competition and inventory pressures in the Chinese liquor industry [1][2][3] Company Actions - Sichuan Tuopai Shede announced a suspension of orders for its Tuopai Tequ 2.0 (20-year and 30-year) starting July 10, with a date for resuming orders to be announced later [1] - Shui Jing Fang implemented a full-channel suspension of its core product, Zhen Niang No. 8 (500ml), and enhanced control over its e-commerce channels [1] - Shui Jing Fang also introduced measures to stabilize the value chain and manage promotional offers for its Zhen Niang No. 8 (520ml) [1] Industry Context - The liquor industry is experiencing a significant inventory pressure, with a shift in consumer drinking habits leading to a more rational approach to consumption [3][4] - The price competition in the 300-400 RMB range, particularly affecting Zhen Niang No. 8, has severely compressed profit margins for distributors [2] - Major liquor companies, including Wuliangye and Luzhou Laojiao, have also adopted similar suspension measures to stabilize prices [3] Financial Performance - Shui Jing Fang reported a revenue of 5.217 billion RMB in 2024, a year-on-year increase of 5.32%, and a net profit of 1.341 billion RMB, up 5.69% [2] - In the first quarter of 2025, revenue growth slowed to 2.74%, and net profit growth was 2.15%, indicating a trend of decelerating growth [2] Strategic Implications - The decision to suspend core products is seen as a necessary move to alleviate channel inventory pressure and create space for price recovery [2][4] - The industry is transitioning from a "channel pressure" model to a "sales-driven" model, focusing on actual product sales rather than merely pushing inventory [3] - The success of these measures in stabilizing prices and restoring consumer confidence will be crucial for the long-term viability of liquor companies [4]