CITIC Construction Investment Food & Beverage: Spring Sugar and Spring Tea Coexist, Focus on Four Key Initiatives by Liquor Companies

“By: Yang Ji 张家祯”

This Spring Sugar Fair is taking place at a time when the liquor industry is in a deep adjustment phase, and during this adjustment cycle the industry is undergoing a profound restructuring—shifting from B-side to C-side, and from channels to consumers. As a result, this year’s Spring Sugar Fair shows a phenomenon of “cold and hot coexisting.” We believe that this phase is not only a clearing out of inventory and performance; the measures and strategic directions that liquor companies are choosing now will affect the industry landscape 3–5 years later. We focus on four key dimensions: price-tier layout, category innovation & new channel layout, product line layout, and nationwide strategy adjustment.

On March 28, 2026, the 114th National Liquor, Food & Trading Fair (2026 Spring Sugar Fair) officially concluded in Chengdu.

This year’s Spring Sugar Fair shows a phenomenon of “cold and hot coexisting,” with hotel exhibitions centered on attracting business “cooling off,” while liquor companies’ confidence, new product launches, and C-side transformation remain “hot.”

1）Hotel exhibitions hit a chill: Before the Spring Sugar Fair’s hotel exhibition activities even began, Kweichow Moutai announced its withdrawal from hotel exhibitions. In addition, Luzhou Laojiao also stopped large-scale activities at hotel exhibitions. Top liquor brands such as Wuliangye and Yanghe Co., Ltd. also did not release information about holding marketing activities during the Sugar & Liquor Fair period. Some media reports said there were more exhibitors than business visitors at this year’s Spring Sugar Fair. We believe that behind this phenomenon, the liquor industry is undergoing a systemic industrial restructuring. Because the channel systems of leading liquor brands are highly mature, the agent teams are stable, and distribution rights are scarce, there is no need to recruit through the hotel exhibition of the Spring Sugar Fair. In the past, the effectiveness of hotel exhibitions was more tilted toward brand promotion. Against the backdrop of the industry shifting from B-side to C-side, liquor companies are moving from “large-scale business recruitment” to “precise, tiered (layered) marketing.” Therefore, hotel exhibitions aimed at the general public cool down, but private and smaller-audience, industry exchanges have not decreased.

2）Liquor companies’ confidence, new product launches, and C-side transformation remain “hot”: Around and before this year’s Spring Sugar Fair, many liquor companies rolled out new products, including Luzhou Laojiao’s Jiao 3 and Jiao 5, the Fifth-Generation Zhen Shiwu, 42% Qinghua Fenjiu Longzun, and the three new liquor-drink offerings under Tang Gou, “Er Jiu Wei Li,” “Hou Lang,” and “Gui Ye.” In addition, Langjiu said it would accelerate the layout of 39% Qinghua Langjiu. Moreover, liquor companies such as Luzhou Laojiao, Shede Spirit, and Jinhui Liquor released investor relations activity record tables, all stating that they will maintain strategic focus, ensure healthy channels and stable price bands, and convey positive confidence.

An industry expert in Chinese liquor, Wang Chaogheng, pointed out that the Chinese liquor industry is currently in an adjustment phase driven by inertia, but in the second half of 2026 there is hope for marginal improvement. On March 24, 2026, Wang Chaogheng, Chairman of Shengchu Group, said at the “23rd Wine Industry Marketing Trend High-End Forum”: 1）Although China’s liquor industry is affected by the misalignment of the Spring Festival timing, with the standout figure that in January to February the retail sales of liquor and tobacco grew 19.1%, real-volume sales (true sell-through) is still showing an inertial decline; 2）Moutai’s new initiatives such as direct sales at 1499 yuan via “i Moutai” have led to a short-term rise in both volume and pricing, but risks must be watched: excessive supply could weaken its price-advantage edge. The long-term effect of its “balancing market-oriented reform with high-end positioning” remains to be tested; 3）Wuliangye expands share through “using price to increase volume,” while Luzhou Laojiao relies on “price protection” to guard channels—both are realistic choices under brand strength. 4）He judged that the industry will remain in an inertia-driven adjustment period, mainly due to high comparison base, Moutai’s siphon effect, and the inertia of government and business consumption policies; however, in the second half of 2026 there is potential for marginal improvement—low base, consumption bottoming out, and the clearance driven by competitive pressure on advantaged brands will help leading companies stabilize. 5）During the adjustment phase, enterprises need to use price to increase volume in the near-high-end tier, focus on core priorities, have manufacturers and sellers share the burden of inventory, and shift to de-centralized brand communication such as short videos to fit the logic of new consumption.

We believe that this phase is not merely the clearing of inventory and performance. The measures and chosen strategic directions by liquor companies today will influence the industry landscape 3–5 years from now. Focus on the following four dimensions:

1）Price-tier layout: Since last year, the wholesale prices of high-end liquor represented by Moutai and Wuliangye have fallen significantly. After this year’s Spring Festival, the wholesale price of 普飞 (“Pu Fei”) has stabilized around 1600 yuan, the wholesale price of 普五 (“Pu Wu”) around 800 yuan, and the wholesale price of 1935 has dropped to 600–650 yuan. The wholesale prices of traditional high-end liquors such as Qinghua Lang and Junpin Xijiu have fallen to 630 and 588 yuan, respectively. Meanwhile, the price levels of low-proof Pu Wu and low-proof Guojiao are also in the 600–650 yuan range. The wholesale price of Honghua Lang 10 has dropped to around 225 yuan. Therefore, we believe that lowering the price of high-end liquor will lead to a redivision of liquor’s price bands. Previously, we typically considered liquor price bands to be divided into mid-low end (below 100 yuan), mid-to-high end (100–300 yuan), near-high end (300–800 yuan), and high end (above 800 yuan). Currently, liquor price bands may change to mid-low end (below 100 yuan), mid-to-high end (100–200 yuan), near-high end (200–600 yuan), and high end (above 600 yuan). With changes in price-tier layout, liquor companies’ quantity-and-price strategies and product layouts also need to be adjusted accordingly.

2）Category innovation & new channel layout: ① Review history: during adjustment periods, the liquor industry often sees category innovation. After the previous round of adjustment, categories emerged represented by non-standard Moutai and aged liquor products, catering to liquor investment and collection demand at that time. Currently, categories such as low-proof liquor, loose liquor & “light bottle liquor” (打酒铺), and health liquor have emerged to meet current consumer needs such as drinkability and value-for-money. Category adjustment and updating are aimed at aligning with consumers’ changing needs for how they drink and in what drinking scenarios. Although short-term contributions from newly launched category types are relatively small, in the medium to long term there may be the emergence of large single products. ② In addition, with the rise of online liquor channels, leading liquor companies have embraced new channels such as instant retail. According to the 2025 Q4 China Liquor Market Business Climate Index (ACI) released by the China Alcoholic Beverage Circulation Association, the business climate indices for online terminal, supermarket terminal, tobacconist terminal, and comprehensive retail terminal are 83.98, 51.14, 41.45, and 42.92 respectively. The underlying reason behind the online channel’s very high business climate index of 83.98 is the fundamental transformation brought by ecommerce roles. Female consumers are becoming the core driving force behind diversified online consumption, and new liquor-drink categories such as low-proof liquor and premixed cocktails are especially favored (business climate index reaches 53.71).

3）Product line layout: Along with the re-positioning of price bands plus changes in government-and-business consumption demand, liquor companies need to optimize quantity-and-price strategies and product line layout. For example, tighten the layout in the 100–600 yuan price range; or explore new high-end drinking scenarios to activate consumption above 300 yuan; or lay out new liquor-drink categories to meet new demand. At present, liquor companies’ mainstream strategies fall into two categories: ① High-end line products hold their prices while mid-end and low-end products expand volume (e.g., Luzhou Laojiao, and regional brands such as Gujing Gongjiu); ② For flagship products with strong brand power, moderately lower prices to increase market share (e.g., Feitian Moutai, Baidai Wuliangye, Honghua Lang, and other national brands with strong brand power).

4）Nationwide strategy adjustment: In today’s industry adjustment period, liquor companies’ nationwide strategies need to further focus and aim to improve the efficiency of spending on marketing and distribution.

Demand recovery is not as expected. In recent years, due to macro factors and other influences, economic growth has slowed somewhat; national income growth has also been affected. In the future, the pace of restoring resident income growth in the medium and short term, and the pace of boosting consumption power, may be slower than expected;

Liquor inventory clearance is not as expected. Liquor is currently in the phase of inventory destocking. If liquor companies’ performance declines to improve channel health, and if sell-through recovery is not as expected, the time when inventory reaches the bottom will be pushed back, and the industry cycle turning point will be extended.

High-end demand remains weak. High-end prices will face pressure.

Food safety risks: In recent years, food safety issues have always been a hot topic of concern for consumers. Although companies in the supply chain continue to improve production quality and control levels, because the supply chain is relatively long—covering many links and companies—there are still risks related to food quality and safety;

Name of the securities research report: 《Chinese liquor II: “cold and hot” coexist at Spring Sugar Fair—focus on liquor companies’ four key initiatives》

External release date: March 30, 2026

Report issuing organization: Citic Securities Company Limited

Report analysts:

Yang Ji SAC ID: S1440525110001

Zhang Jiazhen SAC ID: S1440526030006

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