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Cao Li

Wuliangye Yibin, China’s second-largest liquor distiller, reported its slowest earnings growth in a decade, reflecting the impact of an intensified anti-corruption campaign on ostentation and a slowing economy that has also affected its peers.
First-half revenue of the Yibin, Sichuan-based company rose 4.2 per cent to 52.8 billion yuan (US$7.4 billion) from a year earlier, while net profit attributable to equity holders increased 2.3 per cent to 19.5 billion yuan, according to its earnings statement published on Wednesday. Both revenue and profit grew at the slowest pace since 2015.
Earlier this month, China’s largest baijiu maker, Kweichow Moutai, reported an 8.9 per cent growth in revenue and a 5.3 per cent increase in net profit for the first half, both the slowest in a decade.
Earlier this week, peer Jiugui Liquor reported a 43.5 per cent drop in revenue and a 92.6 per cent plunge in net profit, also its worst in 10 years.
Baijiu, Chairman Mao Zedong’s favourite drink, is regularly served at government banquets and family gatherings. With prices ranging from a few yuan to thousands, it is a staple of Chinese culture. China is also the world’s largest consumer of alcoholic beverages.


A report from Guosen Securities this month said that policy factors led to a sharp reduction in baijiu consumption in the second quarter, which resulted in a significant drop in sales of mainstream products.
The report also said that since July local governments had taken a more nuanced approach to policy implementation, and “after August, normal occasions for personal drinking, family gatherings and popular banquets such as graduation parties will see some recovery”.
After coming to power in 2012, President Xi Jinping launched a sweeping and unrelenting anti-corruption campaign. The crackdown ensnared a record number of high-ranking officials last year, with at least 56 senior cadres at the vice-ministerial level or above investigated, a nearly 25 per cent increase from 2023, according to a Post report from December last year.
An anti-corruption intensity proxy compiled by Goldman Sachs, based on the number of government officials under investigation, remained at a high level in July.
In May, Beijing issued regulations on practising thrift and combating waste in party and government organisations, banning banquets and excessive drinking. Analysts note that the regulation would further hit China’s sluggish consumption.
The austerity measures were likely to further suppress consumption of certain goods and services, Nomura said in a note in June. Institutional investors were concerned that a ban on alcohol at official gatherings could hamper Beijing’s efforts to boost spending and juice up the economy, Goldman Sachs said in the same month.
UBS Group last year downgraded its ratings on Kweichow Moutai and other major liquor distillers, noting that capacity expansions and destocking strategies had created a supply overhang amid waning consumer demand.
Annual retail sales growth, a key indicator of Chinese household spending, has been slowing since May, according to official data.
Kweichow Moutai, which until Wednesday was the most expensive stock in China, has seen its share price drop 2.8 per cent this year, while Wuliangye Yibin has lost about 8.4 per cent.
Wuliangye Yibin’s revenue was expected to grow by about 0.3 per cent this year, while net profit was likely to decline by 3.3 per cent, according to a recent report from Sinolink Securities.


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Liquor bottles from Wuliangye Yibin are displayed at the the China International Fair for Trade in Services in Beijing last September. Photo: VCG via Getty Images

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Shares in distiller Kweichow Moutai, a brand synonymous with lavish banquets, fell more than 6 per cent over the past month. Photo: Getty Images

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First-half revenue and profit at China’s second-largest liquor distiller grew at the smallest pace since 2015


First-half revenue and profit at China’s second-largest liquor distiller grew at the smallest pace since 2015.


Wuliangye Yibin’s profit growth sinks to 10-year low hit by China’s austerity drive

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}First-half revenue and profit at China’s second-largest liquor distiller grew at the smallest pace since 2015

First-half revenue and profit at China’s second-largest liquor distiller grew at the smallest pace since 2015