Just weeks before China’s most important drinking season, the wholesale price of Xijiu’s mainstream product, Yuan Xijiu, plunged in Zhengzhou’s BaiRong wholesale market, exposing fractures in the company’s channel management and inventory discipline. Wholesale boxes that had been trading near 500 yuan fell as low as 330–339 yuan before rebounding modestly to the 420–450 yuan range, and dealers say more than 20,000 boxes have already been sold amid estimates that well over 100,000 boxes flooded the market.
The scale and concentration of supply surprised local merchants. Dealers told market observers that no single wholesale operator could plausibly have supplied such volume, implying coordination or missteps higher up the channel — most likely at the factory or regional distribution level. The rush to offload stock forced some wholesalers to cancel orders and swallow deposits to avoid taking delivery at prices that would immediately generate losses.
The timing is striking. Xijiu’s management only a month earlier had publicly announced a “Marketing 2.0” programme aimed at stabilising supply, prices and brand equity, and the group has publicly committed to tighter controls on marquee SKUs. Yet the episode in Zhengzhou undercuts those assurances and highlights the difference between policy pronouncements and on‑the‑ground execution across China’s fragmented distributor network.
The incident is best read against a broader industry backdrop. China’s baijiu sector has been in a multi‑year adjustment since 2023: demand growth has softened, inventory cycles lengthened and many brands expanded distribution aggressively during the boom years. Xijiu expanded its dealer base during that period and, despite spending more than 300 million yuan in 2025 to help clear channels, the company still faces heavy social inventory. Annual revenues that peaked at around 22.447 billion yuan in 2023 are estimated to have fallen to roughly 19 billion yuan by 2025, intensifying pressure on channel partners.
Price slippage has not been confined to Xijiu’s mass segment. Junpin Xijiu, positioned as a higher‑end rival to the likes of Moutai 1935, saw its 53° 500ml wholesale price fall from 980 yuan at the start of 2025 to about 596 yuan by year‑end — a near 40% decline — with some online promotions driving transaction prices under 600 yuan, well below the 1,498 yuan suggested retail price. That divergence between official pricing and market reality undermines premium positioning and makes brand maintenance more expensive.
Xijiu’s announced remedies include a planned cap on annual market releases of Junpin Xijiu at 4,000 tonnes and the roll‑out of in‑box QR code tracking to deter cross‑regional resale. These are sensible measures in theory: controlling supply and tightening traceability can reduce arbitrage and protect price architecture. In practice, their effectiveness will hinge on rigorous, sustained enforcement across distributors and e‑commerce platforms, where price gaps often reappear.
For investors and competitors, the episode is a reminder that channel quality matters as much as product quality. Mass‑market and semi‑premium segments are particularly vulnerable to overhang, because consumer buying is elastic and big promotions by rivals can quickly recalibrate perceived value. If Xijiu fails to convert channel incentives into real consumption — the so‑called “activation” of bottles into opened, repeat purchases — the firm will continue to wrestle with inventory backlogs and margin compression.
The wider takeaway for consumer goods companies operating in China is that centralised supply caps and digital traceability are only the start. Corporate governance stability, coherent incentives for regional distributors, and careful sequencing of product launches are equally critical. For Xijiu, the immediate priority will be to shore up distributor confidence ahead of post‑New Year reporting and to prevent further episodic floods that could do lasting damage to brand image in both the mid and high tiers.