CITIC Construction Investment: Spring Sugar and Wine Fair Experiences "Hot and Cold" simultaneously; Focus on four key initiatives by wine companies

CITIC Construction Investment Research Report states that this Spring Grain Festival event is taking place in a period of deep adjustment in the liquor industry, and during this round of adjustment the industry is undergoing a profound restructuring in which the liquor industry is shifting from B端 to C端 and channels are shifting to consumers. Therefore, this Spring Grain Festival event shows a phenomenon of “coexistence of cold and hot.” CITIC Construction Investment believes that this stage is not only about clearing out inventory and performance; the measures taken by liquor enterprises and the strategic direction they choose will affect the industry landscape 3—5 years later. The focus is on four key dimensions: pricing-tier layout, category innovation & new channel layout, product-line layout, and adjustments to the national development strategy.

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CITIC Construction Investment Food & Drink: “Cold and Hot” at the Spring Grain Festival, focusing on four key initiatives by liquor enterprises

This Spring Grain Festival is taking place during a period of deep adjustment in the liquor industry, and during this round of adjustment the liquor industry is undergoing a profound restructuring in which it is shifting from B端 to C端 and channels are shifting to consumers. Therefore, this Spring Grain Festival event shows a phenomenon of “coexistence of cold and hot.” We believe this stage is not only about clearing out inventory and performance; the measures taken by liquor enterprises and the strategic direction they choose will affect the industry landscape 3—5 years later. The focus is on four key initiatives: pricing-tier layout, category innovation & new channel layout, product-line layout, and adjustments to the national development strategy.

On March 28, 2026, the 114th National Sugar, Wine & Spirits Products Trade Fair (2026 Spring Grain Festival) officially concluded in Chengdu.

This Spring Grain Festival shows a phenomenon of “coexistence of cold and hot.” Hotel exhibitions with招商 as the core are facing “coldness,” while liquor enterprise confidence, new product launches, and C-end transformation remain “hot.”

1）Hotels expo meets with cold: Before the Spring Grain Festival hotel fair opened, Kweichow Moutai announced that it would withdraw from the hotel fair. In addition, Luzhou Laojiao also stopped large-scale activities at the hotel fair. Other leading liquor brands such as Wuliangye and Yanghe Co., Ltd. also did not release information about holding marketing activities during the fair. Some media reported that there were more exhibitors than visitors and merchants at this Spring Grain Festival. We believe that behind this phenomenon is the fact that the liquor industry is undergoing a systemic industrial restructuring. Because the channel system of leading liquor brands is highly mature, with stable teams of agents and scarce distribution rights, they do not need to use the hotel exhibition at the Spring Grain Festival to recruit business. Previously, the effectiveness of hotel exhibitions was more oriented toward brand promotion. Against the backdrop of the industry shifting from B端 to C端, liquor enterprises are shifting from “large-scale招商” to “precise, tiered marketing.” As a result, the hotel fair aimed at the general public is experiencing coldness, but industry exchanges that are not public and targeted at small circles have not decreased.

2）Liquor enterprise confidence, new product launches, and C-end transformation still “hot”: Around this Spring Grain Festival, many liquor enterprises launched new products, including Luzhou Laojiao’s Jiaoch3 and Jiaoch5, the Fifth Generation Zhenjiu 15, 42-degree Qinghua Fenjiu Longzun, and three new spirits under the汤沟 brand—“Erjiu Weili,” “Houlang,” and “Guiye Liquor Beverages.” In addition, Langjiu stated it will speed up its layout of 39-degree Qinghua Langjiu. Moreover, liquor enterprises including Luzhou Laojiao, Shentuojiu, and Jinhui Liquor released investor relations activity record sheets, all stating that they will maintain strategic focus, ensure healthy channels and stable price schemes, and convey positive confidence.

An expert in the liquor industry, Wang Chaoceng, pointed out that the current Chinese liquor industry is 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 Chaoceng, Chairman of Shengchu Group, said at the “23rd Wine Industry Marketing Trend Summit Forum”: 1）Although the Chinese liquor industry is affected by the misalignment of the Spring Festival, the data showing a 19.1% year-on-year growth in retail sales of tobacco and alcohol categories in January and February is impressive, but actual off-take still shows an inertia-driven decline; 2）Moutai’s new measures such as direct sales at 1499 yuan via “i Moutai” have temporarily boosted both volume and pricing, but it is necessary to be vigilant about how excess supply may weaken its price advantage, and whether the long-term effect of “balancing market-oriented reform and high-end positioning” remains to be seen; 3）Wuliangye expands market share with “price cuts to increase volume,” while Luzhou Laojiao “holds prices to protect 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 a high base, the Moutai siphon effect, and the inertia of government and business consumption policies, but the second half of 2026 is expected to see marginal improvement—low base effects, consumption troughs bottoming out, and the clearing out driven by squeezing out competitive advantages will help leading companies stabilize; 5）During the adjustment period, enterprises need mid-to-high-end products to trade price for volume, focus on core segments, share inventory burdens between manufacturers and merchants, and shift toward decentralized brand communication such as short videos to adapt to new consumption logic.

We believe this stage is not only about clearing out inventory and performance; the measures taken by liquor enterprises and the strategic direction they choose will affect the industry landscape 3—5 years later. The focus is on the following four dimensions of initiatives by liquor enterprises:

1）Pricing-tier layout: Since last year, high-end liquor wholesale prices represented by Moutai and Wuliangye have declined significantly. After this year’s Spring Festival, the wholesale price of 普飞 (Pu Fei) has stabilized around 1600 yuan, and the wholesale price of 普五 (Pu Wu) has stabilized around 800 yuan. The 1935 wholesale price has dropped to 600—650 yuan. The wholesale prices of traditional high-end liquors such as Qinghua Lang and Junpin Xingjiu have fallen to 630 and 588 yuan. In addition, the price tier of low-alcohol 普五 and low-alcohol Guojiao is also in the 600—650 yuan range, and the 10-year wholesale price of Honghua Lang has fallen to around 225. Therefore, we believe that the downward pressure on high-end liquor prices will lead to a reshuffling of the liquor price bands. Previously, we usually thought liquor price bands were divided into mid-to-low-end (below 100 yuan per bottle), mid-to-high-end (100—300 yuan), sub-high-end (300—800 yuan), and high-end (above 800 yuan). Now, the liquor price bands may change to: mid-to-low-end (below 100 yuan), mid-to-high-end (100—200 yuan), sub-high-end (200—600 yuan), and high-end (above 600 yuan). With changes in pricing-tier layout, liquor enterprises’ volume-and-price strategies and product layout 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. For example, after the previous round of adjustment, a new set of categories emerged represented by non-standard Moutai and old-liquor products, catering to the investment and收藏 demand for liquor at that time. Today, categories such as low-alcohol liquor, loose liquor & guangpingjiu (selling-the-bottle liquor stores), and health liquor are emerging, catering to current consumers’ needs for better drinkability, and value-for-money, among other factors. Category adjustment and updating are aimed at matching consumers’ drinking needs and changes in drinking scenarios. Although the short-term contribution of newly emerged categories is relatively small, in the mid- to long-term there may be major single products. ② In addition, currently online liquor channels are on the rise, and leading liquor enterprises are embracing new channels such as instant retail. According to the 2025 Q4 China Liquor Market Business Index (ACI) released by the China Alcoholic Drinks Circulation Association, the business indices for online terminals, supermarket terminals, tobacconist and liquor shop terminals, and comprehensive retail terminals were 83.98, 51.14, 41.45, and 42.92 respectively. Behind the very high business index of 83.98 for online channels is the fundamental transformation of the e-commerce role. Female consumers are becoming a core driver of diversified consumption online, and new liquor beverages such as low-alcohol liquor and pre-mixed spirit drinks are especially popular (business index of 53.71).

3）Product-line layout: With the reshuffling of pricing tiers + changes in government/business consumption demand, liquor enterprises need to optimize their volume-and-price strategies and product-line layout. For example, they may tighten the layout in the 100—600 yuan price range, or explore new high-end drinking scenarios to activate the 300 yuan-and-above price segment, or layout new liquor-beverage categories to meet new demand. Currently, liquor enterprises’ mainstream strategies fall into two types: ① High-end line products support prices while mid-end and low-end products are expanded in volume (e.g., Luzhou Laojiao and regional brands such as Gujinggongjiu); ② Products with strong brand power appropriately cut prices to increase share (e.g., Feitian Moutai, Ba-generation Wuliangye, Honghua Lang, and other national brands with strong brand power).

4）Adjustments to national development strategy: In today’s adjustment period, liquor enterprises’ national development strategy needs to be further focused, aiming to further improve the efficiency of expenditure.

Demand recovery falls short of expectations. In recent years, due to factors such as the macro environment, economic growth has slowed somewhat, and national income growth has also been affected. In the future, the pace of recovery in residents’ income growth in the medium and short term and the improvement in consumption power may be slower than expected;

Liquor inventory de-stocking is also worse than expected. Currently, liquor is in a de-stocking phase. Liquor enterprises’ performance declines are intended to improve channel health. If off-take recovery is also worse than expected, the time when inventory bottoms out will be delayed, and the inflection point of the industry cycle will be extended.

High-end demand remains weak, and high-end prices will face downward pressure.

Food safety risks. In recent years, food safety issues have remained a hot topic of concern for consumers. Although enterprises in the industrial chain continuously improve production quality control, because the industrial chain is long and involves many stages and companies, risks related to food quality and safety still exist;

（Source: Securities Times）