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

CITIC Securities’ research report states that this year’s Chunjiu Fair is taking place during a deep adjustment period for the liquor (baijiu) industry, and during this round of adjustment the industry is undergoing a profound restructuring in which the industry is shifting from B2B to B2C and channels are shifting toward consumers. Therefore, this year’s Chunjiu Fair shows a coexistence of “cold” and “hot.” CITIC Securities believes that this stage is not only about clearing inventory and financial performance; the initiatives and strategic directions chosen by liquor companies today will affect the industry landscape 3–5 years from now. It highlights four key dimensions: pricing-tier positioning, category innovation & new channel layout, product-line layout, and adjustments to nationwide strategy.

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CITIC Securities Food & Beverage: “Hot and Cold” at the Chunjiu Fair—Pay Attention to Four Key Initiatives by Baijiu Companies

This year’s Chunjiu Fair is taking place during a deep adjustment period for the baijiu industry, and during this round of adjustment the industry is undergoing a profound restructuring as it shifts from B2B to B2C and from channels toward consumers. Therefore, this year’s Chunjiu Fair shows a coexistence of “cold” and “hot.” We believe that this stage is not only about clearing inventory and financial performance; the initiatives and strategic directions chosen by liquor companies today will affect the industry landscape 3–5 years from now. Key focus areas include pricing-tier positioning, category innovation & new channel layout, product-line layout, and adjustments to nationwide strategy—four major dimensions.

On March 28, 2026, the 114th National Sugar, Wine & Tea Commodities Fair (Spring Sugar & Wine Fair 2026) officially concluded in Chengdu.

This year’s Chunjiu Fair shows a coexistence of “cold” and “hot.” Hotel exhibitions centered on招商招商 (recruiting franchisees/partners) are “cool,” while liquor companies’ confidence, the launch of new products, and their C-end transformation remain “hot.”

1）Hotel exhibitions are “cold”: Before the hotel exhibition opens at the Chunjiu Fair, Guizhou Moutai announced that it would withdraw from hotel exhibitions. In addition, Luzhou Laojiao also stopped large-scale events at hotel exhibitions. Leading baijiu brands such as Wuliangye and Yanghe Co., Ltd. also did not publish information about running marketing events during the Sugar, Wine & Tea Fair. Some media reports suggest that there were more exhibitors than professional buyers at this year’s Chunjiu Fair. We believe the underlying reason is that the baijiu industry is undergoing systemic industrial restructuring. Since the channel systems of top baijiu brands are highly mature, with stable agent teams and scarce distribution rights, there is no need to recruit via the hotel exhibitions at the Chunjiu Fair. Previously, the effectiveness of hotel exhibitions leaned more toward brand publicity. Against the backdrop of the industry shifting from B2B to C-end, liquor companies are moving from “large-scale recruitment” to “precise tiered/segmented marketing.” Therefore, exhibitions aimed at the general public are “cool,” but industry exchanges that are not public and are within smaller circles have not decreased.

2）Liquor companies’ confidence, new product launches, and C-end transformation remain “hot”: Around this year’s Chunjiu Fair, many liquor companies launched new products, including Luzhou Laojiao’s Jiao 3 and Jiao 5, the Fifth Generation Zhen 15, 42-degree Qinghua Fenjiu Longzun, and three new alcoholic drink products under the Tanggou brand—“Erjiu Weili,” “Houlang,” and “Guiye.” In addition, Langjiu stated that it will accelerate the layout of 39-degree Qinghua Langjiu. Moreover, Luzhou Laojiao, Shede Spirits, Jinhuijiu, and other companies released records of investor relations activities, and all stated that they will maintain strategic resolve, ensure the healthy operation of channels and stability of pricing, and convey positive confidence.

Baijiu industry expert Wang Chaoxing pointed out that the current Chinese baijiu industry is in an adjustment phase driven by inertia, but the second half of 2026 is expected to bring marginal improvement. On March 24, 2026, Wang Chaoxing, chairman of Shengchu Group, stated at the “Twenty-Third China Liquor Industry Marketing Trend Summit Forum” that: 1) Although the Chinese baijiu industry is affected by a mismatch in the timing of the Spring Festival, the data showing a 19.1% year-on-year growth in retail sales of tobacco and alcohol in January–February is impressive, but actual off-take still shows an inertia-driven decline; 2) Moutai’s new policies such as direct sales at 1499 yuan via “iMoutai” have boosted both quantity and price in the short term, but supply excess must be watched because it could weaken the price advantage; the long-term effect of “balancing market-oriented reform and high-end positioning” remains to be tested; 3) Wuliangye’s “using price to expand volume” to gain market share, and Luzhou Laojiao’s “maintaining price to protect channels,” are both real choices under brand strength. 4) He judges that the industry will still remain in an inertia-driven adjustment period, primarily due to high base effects, the Moutai siphon effect, and inertia in policies for government-related and business consumption, but marginal improvement is expected in the second half of 2026—low base effects, consumer “ice point” demand bottoming out, and clearance of weaker players through compression by advantaged brands will help leading companies stabilize. 5) During the adjustment period, enterprises need mid-to-high-end products to drive volume growth by adjusting pricing, focus on core areas, share inventory burdens between manufacturers and distributors, and shift toward decentralized brand communication such as short videos to fit the logic of new consumer behavior.

We believe that this stage is not only about clearing inventory and financial performance. The initiatives and strategic directions that liquor companies choose now will affect the industry landscape 3–5 years later. We will focus on the following four dimensions of initiatives by liquor companies:

1）Pricing-tier positioning: Since last year, the batch price for high-end liquor represented by Moutai and Wuliangye has fallen significantly. After this year’s Spring Festival, the “Pu Fei” batch price has stabilized around 1,600 yuan, and the “Pu Wu” batch price has stabilized around 800 yuan. The 1935 batch price has dropped to 600–650 yuan, and the batch prices of traditional high-end liquors such as Qinghua Lang and Junpin Xijiu have dropped to 630 and 588 yuan, respectively. In addition, the price levels of low-proof Pu Wu and low-proof Guojiao are also in the range of 600–650 yuan, and the 10-year Hong Lang batch price has dropped to around 225. Therefore, we believe that lowering the price levels of high-end liquor will lead to a reshuffling of baijiu’s price bands. Previously, we typically considered baijiu price bands to be divided into mid-to-low end (below 100 yuan), mid-to-high end (100–300 yuan), sub–high end (300–800 yuan), and high end (above 800 yuan). Currently, baijiu’s price bands may be changed 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 positioning, liquor companies’ volume-and-price strategies and product layout also need to be adjusted accordingly.

2）Category innovation & new channel layout: ① Replaying history, during adjustment periods the baijiu industry often sees category innovation. For example, after the previous adjustment period, categories represented by non-standard Moutai and old-liquor products emerged, meeting the investment and收藏 (collecting) demand of that time. Currently, categories such as low-proof liquor, loose liquor & light-bottled liquor (dajiu shops), and health liquor are emerging to meet consumers’ current needs for drinkability and value for money. The updating of categories is aimed at matching changes in consumers’ drinking needs and drinking scenarios. Although short-term new-category performance contributions are relatively small, there may be opportunities for large single products in the medium to long term. ② In addition, with the rise of online alcohol channels, leading liquor companies have been embracing new channels such as instant retail. According to the 2025 Q4 China Alcohol Market Sentiment Index (ACI) released by the China Alcohol Circulation Association, the sentiment indices of online endpoints, supermarket endpoints, tobacco-and-alcohol shop endpoints, and comprehensive retail endpoints were 83.98, 51.14, 41.45, and 42.92, respectively. Behind the online channel’s high sentiment index of 83.98 is a fundamental transformation of e-commerce roles. Female consumers are becoming the core driving force behind online diversified consumption, and new alcoholic drinks such as low-proof liquor and pre-mixed alcohol are especially popular (sentiment index reaches 53.71).

3）Product-line layout: With the reshuffling of price tiers + changes in government-related and business demand, liquor companies need to optimize their volume-and-price strategy and product-line layout. For instance, tighten the layout within the 100–600 yuan range; or explore new high-end drinking scenarios to activate the 300+ yuan price segment; or layout new alcoholic-drink categories to meet new demand. At present, liquor companies’ mainstream strategies fall into two types: ① high-end line products support price maintenance, while mid-end and low-end products expand volume (e.g., Luzhou Laojiao and regional brands such as Gujing Gongjiu); ② strong-brand leading products appropriately reduce prices to increase market share (e.g., Feitian Moutai, Eight-Generation Wuliangye, Hong Lang, and other national brands with strong brand power).

4）Adjustments to nationwide strategy: In the current industry adjustment period, liquor companies’ nationwide strategy needs to be further focused, with the goal of improving the efficiency of expense investment.

Demand recovery is not as expected. 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 recovery pace of residents’ income growth in the medium and short term and the improvement in consumption capacity may be slower than expected;

Baijiu inventory clearance is not as expected. At present, baijiu is in an inventory-deleveraging stage. Liquor companies’ earnings decline is aimed at improving channel health. If off-take recovery is not as expected, the time until inventory is bottomed out will be delayed, and the turning point of the industry cycle will be extended.

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

Food safety risk. In recent years, food safety issues have always been a hot spot of concern for consumers. Although companies in the industry chain have continuously improved the quality and production management control levels, due to the industry chain being relatively long and involving many links and companies, there are still risks related to food quality and safety;

( Source: Securities Times )