For years, the bulk base liquor stored in the cellars of China’s distilleries was considered liquid gold, an asset that supposedly appreciated with every passing year. However, the reality on the ground has taken a sobering turn as the industry’s deep correction moves from retail shelves to the production vats. Recent judicial auctions on platforms like Alibaba and JD.com reveal a startling collapse in value, with base liquor from distressed distillers selling for prices comparable to a bottle of Coca-Cola.
The scale of the devaluation is staggering. In one instance, over 5,500 tons of base liquor from a Sichuan-based distillery were auctioned off for a mere 1.25 yuan per 500 grams, roughly a tenth of its original appraised value. Even the once-invincible 'sauce-aroma' category, popularized by Kweichow Moutai, is seeing its premium evaporate, with some stocks failing to attract bidders even when priced at cost. This trend signals that the sector's consolidation has entered a more aggressive phase, targeting the very foundation of the supply chain.
Industry analysts point to a toxic combination of overcapacity and a lack of brand equity as the primary drivers of this crash. For many small and medium-sized producers, their liquor is effectively a 'blind box' to potential buyers, carrying significant risks of oxidation, contamination, and inconsistent quality. Without the shield of a recognized brand or an established distribution channel, these raw assets are becoming liabilities that even larger, more stable competitors are unwilling to absorb.
The broader economic data corroborates this grim picture of 'volume, price, and profit' all trending downward. While some high-end players remain resilient, nearly 70% of surveyed liquor enterprises expect the downward adjustment to continue throughout the year. As the industry faces an L-shaped bottoming process, the number of scale-level distilleries has already nearly halved from its 2017 peak, marking a permanent contraction of China’s traditional spirits landscape.