The Chinese baijiu market continues to slump, with Guizhou Xijiu’s revenue plummeting by 30% to 15.012 billion yuan in 2025, while the net profit dropped by nearly 68%. At the same time, the wholesale prices of several core products have fallen below the cost for distributors.
According to a report by “21st Century Economic News” on July 11th, the major shareholder of Xijiu, Qiancheng State Assets, disclosed that Xijiu Group’s operating income was 21.529 billion yuan in 2024, with a net profit of 5.563 billion yuan. However, in 2025, the operating income dropped to 15.012 billion yuan, and the net profit was only 1.799 billion yuan, a decrease of over 3.7 billion yuan in just one year.
After breaking away from the Maotai Group in 2022, Xijiu’s business scale expanded for a period. The company achieved operating income of 19.864 billion yuan in 2023, and in 2024, it exceeded 20 billion yuan for the first time, but the growth trend reversed in 2025.
The prices of Xijiu’s core products have been continuously declining. Data from a third-party liquor pricing platform shows that the wholesale price of Junpin Xijiu has dropped to around 590 yuan per bottle, with some e-commerce platforms quoting prices as low as around 586 yuan, a decrease of nearly 40% from the peak of about 940 yuan in 2022; the wholesale price of Jiaocang 1988 has also dropped from around 550 yuan to the current 345 yuan to 350 yuan.
Chinese media reports indicate that the nominal ex-factory price of Junpin Xijiu is around 919 yuan. Despite Xijiu lowering the actual distributor’s cost to below 700 yuan per bottle through various methods, the wholesale price is still lower than the cost. Faced with inventory and financial pressures, some distributors have had to ship at lower prices.
Even the lower-priced products have not been able to maintain their prices. The Yuan Xijiu introduced in 2023 had an initial purchase price of 128 yuan, but by July this year, the wholesale price had dropped to just over 60 yuan.
The changes in sales volume and revenue also reflect a decrease in Xijiu’s unit sales revenue. Qiancheng State Assets’ report shows that Xijiu’s annual sales volume increased from over 27,000 tons in 2022 to about 40,000 tons in 2025, but the operating income in 2025 was over 20 billion yuan less than in 2022. Rough calculations based on sales volume and revenue indicate a significant decrease in the average revenue per ton of Xijiu’s products.
Amid the pressure on core product prices, Xijiu has also started promoting its second lower-priced brand, Zhijiaojiu. In June this year, the company announced Hong Kong artist Nicholas Tse as the endorser of Zhijiaojiu. The “Zhijiao Four Seasons” 500ml product is priced at less than 200 yuan, with the 100ml mini bottle priced at under 50 yuan, while other products are mainly priced between 200 yuan and 600 yuan.
As Xijiu’s performance sharply declines, the consumer market in mainland China continues to be weak. Data from the National Bureau of Statistics of the Chinese Communist Party shows that the total retail sales of consumer goods in the first five months of 2026 only increased by 1.4% year-on-year. A survey of the liquor industry indicates that 60.9% of the interviewed companies stated a decrease in baijiu consumption during the Chinese New Year period; following the holiday and the “May Day” holiday, 82.4% and 75.8% of the companies, respectively, reflected a decrease in baijiu consumption.
The “2026 China Baijiu Market Mid-term Research Report” jointly released by the China Alcoholic Drinks Association and KPMG shows that weak end-sales have led to continuous channel inventory buildup, forcing distributors and retailers to ship at lower prices in order to recover funds. 56.6% of distributors and end retailers stated that the degree of price inversion has worsened compared to the same period last year. Price inversion refers to the market circulation price being lower than the actual cost for distributors. Additionally, 51.2% of distributors and retailers mentioned a decrease in returns, with increased pressure on inventory and cash flow.
The consumption of baijiu continues to shift towards lower-priced products. The “2025 China Baijiu Market Mid-term Research Report” highlights that price inversion is mainly focused on the price ranges of 800 yuan to 1500 yuan and 500 yuan to 800 yuan, while the market sales center has further shifted from 300 yuan to 500 yuan downwards to 100 yuan to 300 yuan.
The 2026 report also indicates that 68.5% of the surveyed liquor companies expect the industry to continue downward adjustment in the second half of the year, with only 2.1% of companies anticipating a significant market recovery.