The bottom line is stopping to maintain the price system, but this does not mean that the whole white sector is on the move. The shift from expansion to digestion in the white wine industry was just in the middle of the day before the stocks were consumed by consumers。
The economic book of the cut-off: less money to keep the price. Rights
The income from the financial statements of a liquor company does not equal the amount of alcohol consumed by consumers during the quarter, but rather the amount of alcohol sold by the manufacturer to distributors throughout the country during the quarter, as well as the amount of alcohol sold through direct-account channels。
The direct cause of the decline in profits in the fourth quarter of 2025 was clear: in december, mao tai officially suspended shipments to traditional distributors。
Why doesn't a company make money in front of it? To understand this behaviour, we need to understand three very critical pricing concepts in the white wine industry: the offer price, the official guide price and the market price。
The price is the price of the liquor store selling the wine to the distributor, which is currently $1169. The official instruction price is the retail price recommended by the manufacturer, i. E. $1499, which is well known. Market wholesale prices are the real bottom-line prices for large-scale transactions in which major distributors transfer each other。
Over a long period of time, the market prices of the flying towers have been $2,500 or even higher. It is precisely because market prices are much higher than those offered at the plant and the guide that the price is earned that the pail has strong preservation and value added attributes. Such attributes allow countless people to keep a boxed pavilion in their garage or basement。
By the second half of 2025, however, overall consumption demand had stabilized and the demand for hospitality and gifts by enterprises had decreased. When fewer people actually open bottles of alcohol in the market, and if the wine factory continues to supply through the source of past plans, there will be larger flows in the market. Root
Prices are bound to fall when there are fewer customers. At that time, market prices were beginning to slacken, and the actual prices of some non-core products on the market even approached the prices offered by the manufacturers。
At this point, mao tai management faced a choice. If deliveries continued, the fourth quarter would be very good and both revenue and profits would remain positive. But at the cost of further excess supply in the market, wholesale prices will continue to fall。
Once prices continue to fall, breaking the popular consensus that the pail will only rise and fall, the bulk of the pail accumulated in civil society will be sold to the market for fear of devaluation. The price system that had been built up over the years would have collapsed if it had been triggered by a drop。
In the face of this situation, xiaotai has calculated a clear economic bill: the profits in the financial statements are only numbers, and the absolute control of the real trade price of the core product is fundamental to the viability of the enterprise. As a result, they have reduced their output, the manufacturers have delivered a little less, the alcohol in circulation in the market is less, and the originally declining wholesale prices have stabilized。
The negative growth in the financial statements was, in fact, a premium for the maintenance of the price system, which was paid with short-term book profits。
Base plate of the direct camp channel: why can't the toilet stop
Seeing that the toilet is actively reducing its supply to stabilize prices, many would ask, "if this works, why don't other white wine companies stop with it? Why don't we all sell less and keep the price steady
The objective situation is that the vast majority of alcoholics do not have the conditions to stop. It dared to step on the brakes in the fourth quarter because it held a bottom card that was not available in other enterprises: a very high proportion of straight-camp revenue。
In the past, almost all chinese white wine enterprises were highly dependent on dealers. The manufacturer only produces and then distributes the wine to large distributors throughout the country, who lay the supermarkets, restaurants and tobacco hotels. The disadvantage of this model, however, is that it is difficult for the manufacturer to control the retail price of the terminal and that most of the profits are earned in the middle。
Since a few years ago, maotai has devoted considerable effort to establishing its own direct-camp system, typically represented by i-tai, a mobile-phone application, as well as by major direct-camp shops. Through these channels, it is no longer necessary to go through the distributors and sell alcohol directly to ordinary consumers at $1499。
This represents a much higher profit margin than sold to dealers at $1169. By 2025, for the first time in history, the income from the direct sale of alcohol by mao tai exceeded the income from the sale of alcohol through traditional distributors。
This means that even if the pedestal completely stopped supplying to traditional distributors within a month, it could still obtain a huge cash flow daily through the i pedestal and the direct gate. The direct-camp channel is the shock-mitigator of the huts, allowing them to withstand the impact of reduced shipments from traditional channels。
But we turn our eyes to other well-known liquor companies in the industry, which is quite different. The direct-camp ratio remains low for many brands, and the company's life cycle remains tight in the hands of distributors. For these listed liquor companies, good performance reports to shareholders are required every quarter。
In times of weak real consumption, manufacturers usually use pressure to perform marketing tasks。
What do you mean, "pressurized"? It's the manufacturer's demand that dealers must call in the second half of the year in advance, and if they don't, next year they won't give a good policy or even be disqualified. In order to retain their agency rights, the distributor had to make a loan to the bank, hand over the money to the manufacturer, and drag a case of alcohol back to his warehouse。
The factory received money and the financial report showed a significant increase in the company's earnings and a great performance. But it's actually a good way to eat. The wine was simply moved from the manufacturer's warehouse to the dealer's warehouse and was not really consumed by consumers. The dealer's financial chain is tight, paying rent, wages and loans every month。
When the liquor in the warehouse could not be sold, they had no choice but to sell it at a reduced price。
This has led to a price reversal that is now prevalent in the white wine market. The so-called reverse price is the price that the distributor sells to the consumer, which is lower than the price he takes from the manufacturer. For $800 worth of wine, $750 in exchange for a life-saving cash flow. Selling a bottle is 50% short。
At this point in time, if the manufacturer chooses to stop the goods like a hut, the financial data will immediately fall off the cliff; if the pressure continues, the dealer may collapse at any time. Other liquor companies do not have direct profits such as those of the huts, but have to strike a difficult balance between financial losses and losses of dealers。
A real market bottom line: digesting social stocks is a long cycle
During the long period of the white wine boom, total output and total sales for the whole industry have been growing at a high rate. But we need to face up to the fact that, because white wine does not have a shelf life and some of the wines have financial attributes, large quantities of white wine produced in the past have not turned into empty bottles, but into social stocks。
The wine was lying quietly in the storerooms of agents at all levels, in the back of the smoke hotel and in the storage rooms of ordinary consumers. Everyone's expecting the price to rise, so they're willing to save。
The pace of macroeconomic performance has now become more stable, and consumer perceptions of alcohol purchases have become more pragmatic. The specifications and frequency of business feasts have become reasonable, and ordinary people are more inclined to consume rationally. When people stop chasing up alcohol, the demand for the whole market returns to the true open rate, which is the amount that people actually drink。
This huge stock gap will take time to digest when the actual rate of consumption falls far short of the rate of plant production over the past few years. At the bottom of the real industry, it is not the financial data of a single quarter, but the day when the social stocks accumulated at all stages are completely digested and the real demand of the market rebalances with the production of the plant。
This process of digesting stocks will not be as dramatic as the one in the cinema, but it will be a calm, slow and even painful process. At this stage, there will be a marked division of markets。
A small number of firms with absolute brand influence and historical accumulation, such as a pao, can maintain a space for price dignity and profit through their own large direct-account system and strong brand consensus. They are relatively less affected by macrocycles。
High- and sub-high-end brands on the meso level will face a long span of time. Their task is to ease the burden on distributors, to stop blindly pressing through channels, to get down to consumer breeding and to rob limited market shares of real quality and services。
They may experience one or two years of flat performance until supply-demand relations return to normal。
And the marginal liquor companies that have over the past few years been working against the wind, overmarketing, without solid foundation and a solid consumer base will face a real survival test。
When consumers keep their money bags tight, every penny is spent on a knife, and poor and low-quality products are hard to find. These backward production capacities will be phased out and eventually withdrawn from the market。
Concluding remarks
Powder has been proactive in reducing deliveries in order to maintain the bottom line of its brand value. This practice reflects the soberness of enterprises in the face of market volatility. But let us understand that the soberness of a leading firm does not immediately relieve the stock pressure that has accumulated throughout the industry for many years。
The white wine industry is experiencing a typical economic cycle of transition from expansion to inventory digestion. This cycle takes time and patience。
