<div id="readability-page-1">As China’s traditional spirits and premium wines grapple with declining consumption, a significant shift is under way across the beverage landscape. This three-part series examines the challenges faced by Maotai town as its once-coveted baijiu loses its lustre, the impact of economic shutdowns on European wine imports, and the rise of craft beer as a budget-friendly alternative for consumers seeking quality without breaking the bank.\nOn the ninth day of the ninth lunar month, when the rainy season has typically come to an end and the waters of the Chishui River run clear, baijiu distilleries in Maotai town in China’s Guizhou province stage elaborate ceremonies to kick off the annual brewing cycle.\nIt is an auspicious time when China celebrates the Chung Yeung Festival – also known as the Double Ninth Festival, as nine is associated with considerable positive energy. And distilleries capitalise on the festivities by feeding the first batch of crushed red sorghum – the main raw material for their high-proof fiery spirits – into fermentation pits.\nBut this year, the festive mood in what is known as China’s liquor capital was largely tempered. Relentless rain and thick fog settled in, seemingly mirroring a prolonged downturn across the baijiu sector nationwide.\nOn the holiday, October 29, the wholesale price of the town’s luxurious flagship product – made by the Kweichow Moutai Company and marketed as Moutai Flying Fairy – fell to what observers described as a new low in recent years.\nThe state-backed giant, whose name derives from an older romanisation of Guizhou Maotai, has come under mounting pressure. And several hundred of what were once more than 1,000 smaller distilleries in the town have already been forced to shut down in the last several years, leaving only a fraction in operation, according to residents.\n“We don’t know if this is a long-term transformation or just a temporary winter before spring returns,” said Luo Jiajia, whose family runs a local distillery, Changhong, which operates under the English brand name Longhoom. “Frankly, we’re also at a loss and navigating a period of uncertainty.”\n\nThe sector’s struggle reflects weak domestic consumption, but deeper shifts are also at play. Younger Chinese are rejecting forced-drinking norms, and Beijing’s latest austerity measures, in part, ban alcohol at official banquets – a double blow to the traditional demand drivers of baijiu. For distilleries, the process of rebranding and finding new markets has become existential.\nCompared with other towns also known for baijiu production, Maotai is especially exposed to Beijing’s tightening grip on Communist Party discipline. For decades, the state-owned Kweichow Moutai’s prosperity was linked to public-sector purchases that were largely indifferent to prices. And the firm’s success gave rise to myriad smaller liquor makers and merchants. A stroll through town finds it is easier here to buy baijiu than bottled water.\nMaotai town also holds historical significance as a red-tourism site, with a deep connection to the Long March – the large-scale military retreat by the Communist Party’s Red Army from the Kuomintang, or Nationalist, forces from 1934 to 1936. General Geng Biao (1909-2000) said in his memoir: “Some soldiers bought [baijiu made in Maotai] to refresh themselves, some rubbed [it on] their feet to relax the muscles and stimulate blood circulation.”\nAnd in more recent history, Maotai town frequently hosted team-building activities among public officials. Many would visit small shops to purchase relatively affordable bulk baijiu, often as souvenirs or gifts. But several shop owners say such visits have dwindled, and when they do occur, visitors are more hesitant to break away from guided tours to buy liquor.\nToday, Kweichow Moutai and the remaining small distilleries in the township face their own version of a long march – striving to break free from a reliance on officialdom, the public sector and a drinking culture that they long depended on.\n“In short, the way liquor is expressed [in China] truly needs reconstruction,” said He Yong, secretary general of the China Alcoholic Drinks Association, an industry group. He was speaking last month at the Chishui River Forum in Maotai town. “We often say that drinking around the world serves two purposes: to please others or to please oneself. China stands out for its predominantly social-driven drinking culture.\n“Yet, we are witnessing a shift from pleasing others to pleasing oneself, especially among the younger generation.”\nIn the past, we primarily focused on business-to-business. But now, we also need an outlet for end users\nLuo Jiajia, Changhong distillery\nAt the same time, Kweichow Moutai has moved to distance itself from images of extravagance and corruption, while launching products aimed at younger consumers – from baijiu-flavoured ice cream, to alcohol-infused lattes in a partnership with China’s biggest coffee chain, Luckin Coffee.\nThe pivot has become more urgent as China rapidly ages. The core baijiu consumer cohort – typically people in the 30-55 age range – has shrunk by about 28 million over the past five years, said Li Xunlei, chief economist at Zhongtai International, at the same event.\nThis month, in an effort to reverse the weakened state of the baijiu industry, Guizhou issued a three-year plan to reframe the sector from merely “selling liquor” to promoting a broader baijiu-centred “lifestyle”. The strategy includes integrating baijiu with tourism, sports, cultural events and wellness services, and developing low-alcohol, fruit-infused baijiu and Chinese-style cocktails.\nBut compared with industry giants, smaller producers without widely recognised brands face steeper challenges in launching new products.\n“We can only focus on expanding sales channels,” said Luo at Changhong.\nThree years ago, Luo’s family never had to worry about distribution: merchants and companies bought finished products directly, and distilleries often had to queue for packaging supplies. This year, a day before Chung Yeung, Luo manned a small stall at a government-organised baijiu fair near the town square in a bid to entice passing tourists.\n“In the past, we primarily focused on business-to-business,” she said. “But now, we also need an outlet for end users.”\n\nOther local baijiu makers are trying to change perceptions on social media. At the Qiantai distillery by the Chishui River, manager Xiao Shuai posts videos to Douyin, the Chinese version of TikTok, showing the distillery’s daily operations – from steaming to fermentation – while also offering his own commentary on China’s drinking culture.\n“I don’t think young people avoid baijiu simply because they reject strong alcoholic drinks,” Xiao said. “Many still enjoy going to bars to drink rum, cocktails, whisky or Hennessy, but actually those are also strong.\n“It’s just that they prefer not to be in authoritative or high-pressure situations where they’re forced to drink excessively.”\nLike other domestic sectors facing sluggish domestic demand, baijiu producers are also eyeing overseas markets. Unlike other spirits categories, Chinese baijiu is overwhelmingly dependent on the home market. But challenges remain amid a global trend by Generation Z towards lighter drinking, industry insiders say.\nKweichow Moutai has been taking the lead in the quest overseas, even making an appearance at Paris’ Viva Technology conference in June. Currently, the firm has intensified its market efforts in regions where Chinese enterprises are concentrating their overseas expansion, company director Wang Li told investors this month.\nA loss of consumption scenarios, shifting habits and incompatible business models mean the industry is at a critical transformation point, Wang said.\n“Despite numerous difficulties and challenges, it also represents a valuable opportunity for the industry to restart, reinvent and realign itself to better adapt to the market, meet demand and foster development,” Wang added.\n\nSmaller brands, under the guidance of local governments, commerce chambers and industry associations, have also joined the campaign by participating in overseas wine expos and trade fairs.\nMany baijiu producers first prioritise Hong Kong and Southeast Asia in expansion efforts. In early November, more than a dozen Guizhou distilleries attended the Hong Kong International Wine &amp; Spirits Fair.\n“In Southeast Asian countries, people are relatively familiar with Chinese culture, so exporting to these markets should be feasible,” Luo said. “The key question is whether local economies can afford it.”\nFor many in Maotai town, memories of a booming market just four years ago still burn bright in their minds. The wholesale price of Kweichow Moutai was more than twice what it is now. More than just liquor, the spirit was treated as “liquid gold” – a status symbol in gift-giving, a collectible to be locked away in a safe, or an investment made with the belief that the spirit’s value would appreciate.\nIndustry insiders point out that baijiu is a cyclical sector, with roughly five-year swings, but many doubt whether the previous frenzy will ever return.\n“I think only in China would liquor be attached to a financial value. After all, it isn’t really gold, right?” said Xiao at Qiantai Distillery. “Now we’re gradually seeing a return to its fundamental value” – something to drink.\n“In my opinion, that’s exactly how it should be.”\n</div>

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<p>China's baijiu industry, centered in Maotai town, faces challenges due to declining consumption, economic shifts, and changing cultural norms. The Kweichow Moutai Company and smaller distilleries are struggling as younger Chinese reject traditional drinking customs and austerity measures limit alcohol at official events. The industry is attempting to rebrand and find new markets, with efforts to appeal to younger consumers through innovative products like baijiu-flavored ice cream and alcohol-infused lattes.</p>

China’s liquor capital faces long march to rebirth as baijiu’s ‘liquid gold’ glory wanes