Core Viewpoint - Wahaha Group has terminated its contract manufacturing relationship with Jinmailang, citing quality control issues and production capacity constraints as key reasons for the decision [4][6][10] Group 1: Company Actions and Statements - On May 15, Wahaha announced the end of its contract with Jinmailang, stating that some batches of bottled water did not pass quality checks during internal inspections [4][6] - Wahaha emphasized that all currently sold bottled water meets national quality standards and its own quality management standards [4][6] - The company has completed the layout of 18 high-speed production lines and has built several modern factories to stabilize supply and achieve full self-production [4][8] Group 2: Market Context and Consumer Reactions - The termination of the contract has sparked discussions among consumers regarding the consistency and quality of bottled water, with some expressing concerns about the lower price of Jinmailang's products compared to Wahaha's [6][8] - Wahaha's sales have significantly increased since March of the previous year, leading to a situation where production capacity could not meet demand, necessitating the use of contract manufacturing [8][9] Group 3: Industry Implications - The contract manufacturing model is common in the consumer goods industry, allowing companies to quickly expand capacity and reduce transportation costs [6][8] - Analysts suggest that Wahaha's shift towards contract manufacturing aligns with the beverage industry's trend towards lighter asset models, which can help address overcapacity issues faced by Jinmailang [8][9]