In the heartland of Anhui province — a region famed for strong drinking culture and a string of nationally successful distilleries — one locally rooted brand is slipping away from its peers. Jinzhongzi Wine, the only listed spirit producer headquartered in Fuyang, has reported yet another annual loss for 2025, deepening a multi‑year slump that contrasts sharply with the fortunes of its provincial rivals.
The company’s year‑end guidance flagged a net loss attributable to shareholders of between Rmb150m and Rmb190m, and an adjusted loss (excluding nonrecurring items) of Rmb170m–210m. Those figures extend an alarming run: five consecutive years of net losses and seven years of adjusted losses, with cumulative hits of roughly Rmb800m and Rmb1.24bn respectively across those windows. Management pointed to a shrinking market, channel upheaval and sustained investment in customer cultivation as the proximate causes.
Jinzhongzi’s troubles are not simply a matter of temporary market softness. Since its 2012 peak — when revenue reached about Rmb2.3bn and net profit topped Rmb560m — the company has seen demand and margins compress. Attempts to plug revenue gaps by selling land and property have become a recurring lifeline: asset disposals and a discounted sale of a 92% stake in an affiliate for Rmb126m underline how frequently the balance sheet has been tapped.
A change of shareholders in 2022 — with state‑linked investor China Resources taking a strategic stake — brought a flurry of management replacements and a new strategy intended to graft consumer packaged‑goods and beer‑channel know‑how onto a baijiu business. The experiment has had limited success: senior hires from China Resources left or were reshuffled, and the firm’s bid to move upscale while preserving low‑end volumes has delivered neither meaningful premium traction nor protected its base.
Product and channel economics help explain why. Jinzhongzi’s core remains low‑priced baijiu, which accounted for Rmb330m (64.5%) of white spirit revenue in the first three quarters of 2025; mid‑range contributed Rmb131m (25.6%), while high‑end sales were only Rmb51m (under 10%). That mix leaves the company exposed to fierce price competition and shrinking scale economics in a market that has been contracting for years.
The contraction is systemic. China’s distilled spirits output (measured in 65° equivalent) fell 12.1% in 2025 to 3.549 million “10,000‑kilolitre” units and marked the ninth consecutive annual decline; output is more than 73% below the 2016 peak. Within this shrinking, mature market, dominant provincial names such as Gujing Gong (古井贡酒), Yingjia Gong (迎驾贡酒) and Kouzijiao (口子窖) have strengthened their positions: in the first three quarters of 2025 their revenues were Rmb16.43bn, Rmb4.52bn and Rmb3.17bn respectively — multiples of Jinzhongzi’s turnover.
Competition is intensifying not only from Anhui champions but from outside brands that have crept into Fuyang’s wedding‑and‑gift channels and retail shelves. Industry veterans describe a market where brand equity, distribution muscle and pricing power decide winners; Jinzhongzi today lacks a convincing advantage on any of those fronts. For management and new shareholders, the strategic options are stark: rebuild a credible premium franchise, consolidate through mergers, return to a narrowly regional play, or continue to monetise assets while shrinking operations.
Local employees and former staff recount a sharper cultural problem: consumers in Fuyang no longer default to the hometown label, and younger drinkers show different tastes. The mismatch between fast‑moving consumer‑goods methods imported by China Resources and the idiosyncratic brand work required for baijiu has frustrated efforts to reverse the decline. For investors and local policymakers, Jinzhongzi’s slide is a case study in how even heritage brands can be hollowed out if product positioning, channel strategy and organisational continuity are not aligned.