Ask AI · How will personnel turmoil at Wuliangye affect its strategic layout?

Author: Lin Luoxu

Source: Global Finance Talk

When the terminal transaction price of the 8th-generation Wuliangye fell below 750 yuan—down nearly 30% from the official ex-factory price of 1,019 yuan—this strong-flavor baijiu leader that once stood side by side with Kweichow Moutai in the market has already lost the battle for the most core pricing power in the high-end baijiu segment.

More seriously, after years of stalled growth and strategic confusion, the company ultimately faced a sudden personnel earthquake, tearing open the underlying problems hidden beneath its glossy exterior.

On February 28, 2026, the Sichuan Provincial Commission for Discipline Inspection and Supervision issued a notice stating that the dual-chairperson—former chairman—Zeng Congqin of Yibin Wuliangye Group Co., Ltd. and Yibin Wuliangye Co., Ltd. was suspected of serious violations of discipline and law, and was placed under disciplinary review and supervision investigation; on the same day, he was taken into custody for investigation.

And just four months earlier, Zeng Congqin’s predecessor and the former chairman of Wuliangye, Li Shuguang, had just been expelled from the Party and removed from public office due to serious violations of discipline and law. Within half a year, two consecutive heads were taken down—an occurrence that is extremely rare among A-share listed companies.

When the “Zeng Congqin era” came to an abrupt end, what remained for Wuliangye was not only the aftershocks of personnel instability, but also a long-accumulated growth predicament and brand concerns.

Strategic ideals vs. the gap with reality

From when Zeng Congqin formally took charge of Wuliangye in 2022 to when he left under a cloud in 2026, his four-year tenure coincided exactly with a key turning point for the baijiu industry—from a golden growth period to a deep adjustment phase.

The brand vision proposed early on—“a concentrated national spirit, a harmonious and beautiful Wuliangye, and China’s baijiu king,” the “135” development strategy, and an aggressive price-hike approach along with sweeping channel reforms—ultimately failed to help Wuliangye narrow the gap with Moutai.

At the execution level, its core actions were concentrated across four dimensions: optimizing the product matrix, building the upward “Classic Wuliangye” to benchmark Feitian Moutai, and consolidating the lower-end series to focus on core SKUs; taking an aggressive approach to pricing—on February 2024, raising the ex-factory price of the 8th-generation Pu Wuliangye from 969 yuan to 1,019 yuan, marking the first time it crossed the 1,000-yuan threshold; reforming channels by breaking the traditional wholesaler big-business model and implementing a marketing structure of “headquarters handles the overall coordination, battle zones lead the main battles,” rolling out “three stores and one company” terminals, and pushing direct sales and digital transformation; and strengthening brand marketing by promoting cultural marketing, advancing an internationalization layout, and elevating the high-end image.

However, reality did not play out as hoped. Those core measures instead trapped Wuliangye in multiple vicious cycles involving pricing, channels, and branding.

Over the past five years, China’s baijiu industry has gone through a deep cycle shifting from mass expansion to extreme differentiation. The Matthew effect is increasingly prominent in the high-end baijiu market above 800 yuan.

Moutai firmly sits as the absolute industry leader. Its revenue grew from 109.4 billion yuan in 2021 to 171.9 billion yuan in 2024, while its high-end market share continued to break through. Second-tier players such as Luzhou Laojiao and Shanxi Fenji accelerated their catch-up by relying on differentiated positioning and flexible channel strategies. Over the last four years, their revenue compound growth remained above 18%, and their industry ranking kept moving up.

In this inventory-based contest, “the baijiu king of strong aroma” Wuliangye fell into an unprecedented growth predicament.

The revenue gap with Moutai widened from 43.2 billion yuan in 2021 to 82.7 billion yuan in 2024—nearly doubling over four years. The “Maotai–Wuliangye” dual oligopoly pattern in the baijiu industry has effectively become a thing of the past.

Moreover, its Q3 2025 report delivered the worst results since 2015. Revenue and net profit both fell in double digits in the first three quarters. In the third quarter alone, revenue nearly halved and net profit plunged by more than 65%. Among leading liquor enterprises, its performance ranked at the bottom.

In Q3 2025, Wuliangye recorded operating revenue of 8.174 billion yuan, down 52.66% year over year, and attributable net profit of 2.019 billion yuan, down 65.62% year over year. By contrast, in the same period Shanxi Fenji achieved operating revenue of 8.960 billion yuan and attributable net profit of 2.899 billion yuan—exceeding Wuliangye on a single-quarter basis.

This means that if Wuliangye remains sluggish, its second-place position is in danger.

Wind’s consistent expectations show that for 2025, Wuliangye is expected to have operating revenue of about 76.157 billion yuan, down 14.60% year over year, and attributable net profit of about 25.891 billion yuan, down 18.72% year over year.

If we put it more harshly, the five years from 2021 to 2026 covered exactly the complete career cycle of Zeng Congqin—from being parachuted in, to officially taking charge, to being taken down—while also covering Wuliangye’s entire process from “industry dual oligarchs” to “growth losing momentum and falling behind.”

Deep-rooted predicaments behind the performance slide

Breaking it down, what exactly went wrong with Wuliangye?

First, the price-hike strategy failed across the board, and its channel ecosystem was severely damaged.

Price increases were the most core pricing move during Zeng Congqin’s tenure. The intention was to raise the ex-factory price of Pu Wuliangye to a level comparable to Feitian Moutai, reshape Wuliangye’s high-end value benchmark, and narrow the brand-price gap with Moutai.

But he overlooked a key premise: Moutai’s price increases are supported by strong brand power and rigid demand, whereas Wuliangye’s brand clout in the high-end market is no longer comparable.

After the price increase, the wholesale price of Pu Wuliangye continued to fall, creating a serious price inversion. According to media reports, during the 2025 Double 11 period, the carton-quote price of Pu Wuliangye dropped to 820–850 yuan per bottle, while the loose-bottle wholesale price fell below 800 yuan. The post-coupon transaction price on some e-commerce platforms even breached the 750-yuan line, creating an inversion of nearly 27% against the 1,019-yuan ex-factory price.

This means Wuliangye’s distributors have fallen into a vicious cycle of “selling one bottle at a loss for every bottle sold.”

To stabilize channels, Wuliangye had no choice but to roll out high subsidies. In December 2025, while maintaining the 1,019-yuan ex-factory price, it provided a discount subsidy of 119 yuan per bottle to distributors. The actual invoiced price fell to 900 yuan, effectively lowering the ex-factory price.

This was the first indirect price cut for Pu Wuliangye in nearly ten years, and it also announced a comprehensive failure of the “support prices” strategy.

Second, the ultra-high-end strategy did not meet expectations; resources were too dispersed to take shape.

During his tenure, Zeng Congqin kept trying to break through the ultra-high-end market above 3,000 yuan with Classic Wuliangye, aiming to break Moutai’s monopoly-like positioning.

But in terms of actual performance, Classic Wuliangye has never formed a scale effect. Market recognition has been extremely low. It has neither opened up the high-end business consumption market nor established strong collectible and financial attributes. In the end, it could only rely on pushing inventory through channels to complete sales targets—further increasing the inventory pressure on distributors.

Although Wuliangye has never disclosed the sales situation of Classic Wuliangye, broker data shows that by the end of 2025, Classic Wuliangye’s annual revenue was still less than 1 billion yuan, accounting for under 1% of Wuliangye’s total revenue. This is far from its positioning as a “core ultra-high-end flagship.” It also created a large mismatch with early market expectations, and it scattered the resources and attention of the main brand.

Third, the channel reform remained superficial, and the wholesaler-dominated system’s accumulated problems were not removed.

Data shows that in 2025, Wuliangye added 474 “three stores and one company” units. The share of revenue from direct channels rose to 43% at one point, and online channel sales increased by 8% year over year. But these reforms did not fundamentally change Wuliangye’s reliance on the wholesaler-dominated channel structure; the company’s ability to control channels still remains weak.

Wholesalers still hold key channel resources. Problems such as cross-regional arbitrage and low-price dumping continue to occur despite repeated prohibitions. For price-control policies, the effect is basically non-existent.

Even if Wuliangye replied on investor platforms that it has already laid out e-commerce channels for digital transformation, built a private-domain system, uses data for precise operations, and connects online and offline scenarios to effectively enhance user stickiness and channel efficiency—adding that it would continue to empower the brand through digitalization—based on the situation so far, the so-called digital transformation is slow. More of it stays at a superficial level like “one bottle, one code,” without truly mastering terminal sell-through data. It cannot react quickly to market changes, which ultimately leads to persistently high channel inventories.

Market data shows that as of the first half of 2025, the social inventory depth held by Wuliangye distributors reached 5–6 months, far exceeding the industry’s healthy level of 1–2 months and the warning level of 2–3 months. Channel turnover efficiency has declined.

The above issues are directly reflected in performance. Even though in the first two years of Zeng Congqin’s tenure Wuliangye still maintained some growth momentum, the hidden risks caused by deviations in core strategy execution finally集中爆發 in 2024.

Its growth rate has always lagged behind leading peers, and the gap with Moutai has continued to widen. Its second-place position is in danger, becoming a cruel reality that is hard to change.

Brand value continues to be diluted

In its financial reports, Wuliangye explained that the performance decline was mainly because “the baijiu industry is in a deep adjustment phase; the recovery of effective demand fell short of expectations. The company proactively controls volume to reduce inventory and ease channel pressure.”

But the sharp drop in contract liabilities directly reflects distributors’ weak intention to place orders. Even with proactive stocking, the effect of inventory reduction remains limited.

Looking deeper, the underlying reasons are that Wuliangye’s long-standing core moat has continued to narrow. Beyond the strategic issues mentioned above, structural problems have also emerged irreversibly in the brand and products.

In a sense, Wuliangye’s brand power decline is one of the most representative systemic weakening cases in the high-end baijiu industry.

The brand power of high-end baijiu is comprehensively reflected across six dimensions: pricing power, channel premiums, mental positioning, market share, value scarcity, and long-term growth expectations.

And Wuliangye’s brand power deterioration is not a fluctuation in a single link. It is the loosening of its foundations across all dimensions, continuously and persistently.

Pricing power and channel premiums do not need further elaboration. What is more critical is that consumer mental positioning keeps degrading, and the brand’s social attributes and scarcity have weakened significantly.

The core value of high-end baijiu lies in its “hard currency” attribute in social settings and its high-end positioning in consumers’ minds. This is the foundational support for brand power. Wuliangye’s decline in this dimension means the most fundamental loss of its brand foundation.

As the voice in gifting and business core scenarios weakens, its brand financial attributes and value-preservation capability are lost; and consumers’ mental positioning becomes unclear—these are the three most critical points.

In business gifting: the business gifting scenarios where “Maotai and Wuliangye” once stood side by side have now formed a consumer recognition of “Maotai as the first choice, Wuliangye as the backup.” Wuliangye’s social and business value has shrunk significantly.

In brand power: it is largely reflected in second-hand circulation and collectible value preservation. Moutai Feitian’s second-hand buyback price has long stayed stable at more than 90% of the official guidance price, and year-specific baijiu even has a stable value appreciation attribute. By contrast, Wuliangye’s Pu Wuliangye second-hand buyback price is only 60%–70% of the ex-factory price. Some series and year-specific products even show cases like “the longer you hold it, the less it is worth,” easily forming a general perception of “buying Maotai preserves value, while buying Wuliangye is cheaper.”

In terms of consumer mental positioning: it remains blurred. Wuliangye has always reinforced its brand positioning externally as “a national-strength strong aroma, China’s baijiu king.” It tries to raise the brand image through cultural marketing, but in actual market performance it has never been able to shake the label of “an alternative.” In consumers’ decision-making chain, “if the budget is sufficient, buy Maotai; if the budget is limited, buy Wuliangye” has become the mainstream choice. Wuliangye’s differentiated perception has disappeared, and even the recognition that “Wuliangye is the value-for-money pick” has emerged, completely diverging from the high-end brand positioning.

Blurred consumer mental positioning is also related to the confusion in the product matrix.

For Wuliangye’s main-brand high-end line, besides the core 8th-generation Pu Wuliangye, there are multiple products such as 1618, Jiao Bei Pai, Classic Wuliangye, and more. The price bands overlap heavily, further intensifying consumer confusion about Wuliangye’s high-end products and weakening the flagship’s role as a value benchmark.

In addition, series products and OEM/label products are overflowing, severely draining the main brand’s reputation. Although Wuliangye has repeatedly proposed “shrinking the brand” and cleaning up redundant OEM/label products, as of 2025, Wuliangye still has over a thousand product barcodes across series and OEM/label products. Its price bands cover everything from dozens of yuan to over a thousand yuan.

Most importantly, the absence of a second growth curve means the core product is unstable, and it becomes even harder to make progress in the mid-to-upper high-end market. Products such as Wuliangchun and Wuliangchunji continue to get stuck in internal competition within the 200–500 yuan mid-to-upper high-end price range, constantly contending with products like Jianan Chun and Yanghe Tian Zhi Lan. They are unable to form differentiated competitive strength, and they further固化 the brand image of “the high-end cannot be held, the low-to-mid cannot win.”

In terms of youth orientation and internationalization, Wuliangye is also unremarkable. The 29° Wuliangye·One Sight and One Love that has global endorsement by Deng Ziqi still shows poor sales performance despite the star effect. According to data from Taobao’s official flagship store, the sales volume of Wuliangye One Sight and One Love, priced at 789 yuan for a 500ml two-bottle set, is 800+.

All of this directly reflects in the secondary market. The market does not look very favorably on the brand’s long-term growth expectations. As of March 23, 2026, Wuliangye’s TTM price-to-earnings ratio is 13.68x, lower than Kweichow Moutai’s 19.59x and Shanxi Fenji’s 14.77x. It is at around the 0.25th percentile over the past 10 years.

As of the end of Q3 2025, the share of institutional holdings in Wuliangye stood at 68.87%, down to the lowest level in nearly 5 years, further confirming the continued weakening of the brand’s investment value.

Personnel turmoil and governance loopholes

Looking back to October 2025, Wuliangye’s former chairman, Li Shuguang, was expelled from the Party and removed from public office due to serious violations of discipline and law. The notice stated that he “relied on the enterprise to eat the enterprise, misused public power for private purposes, and used his convenience in his position to seek benefits for others in project contracting, liquor distribution rights, and so on, and accepted property and money in particularly huge amounts.”

Just four months later, Zeng Congqin was also investigated, exposing the company’s long-standing corporate governance loopholes.

As a core state-owned enterprise in Yibin, Wuliangye’s executive team has long been brought in through parachuting by local government officials rather than being cultivated from within the liquor industry. This leads management often to lack long-term operating experience in the baijiu business, making it easier to make strategic decisions oriented toward short-term political achievements, while overlooking the company’s long-term work in brand building and restoring the channel ecosystem.

Personnel turmoil also brings significant uncertainty to Wuliangye’s future development. Ongoing instability will inevitably cause the company’s strategy to swing and be interrupted. After new management takes over, it needs time to familiarize itself with the business and formulate new strategies, which will cause Wuliangye to miss a valuable window for transformation at the critical moment during the industry’s deep adjustment phase.

It is undeniable that as a leading enterprise of strong-aroma baijiu in China, Wuliangye has a thousand-year brewing history, the largest solid-state fermentation capacity nationwide, and Ming-dynasty ancient cellar pits with over 650 years of uninterrupted fermentation—these are core advantages that cannot be replicated.

But reforms that stay on the surface have failed to resolve deep-rooted accumulated problems. In the end, the company welcomed a comprehensive performance decline and a personnel earthquake. Today, the Zeng Congqin era has ended, but Wuliangye’s predicament is far from over.

The replacement of leadership is only the beginning. The real test lies in whether it can break away from long-standing path dependence, rebuild brand value, repair the channel ecosystem, and improve corporate governance.

If it merely continues cycling through the “price increases, stock-pushing, and inventory reduction” vicious loop, then this leading liquor enterprise will only be gradually marginalized in the industry’s deep adjustment.

Notice to readers: This article is written based on publicly available information and related content provided by interviewees. Global Finance Talk and the article’s author do not guarantee the completeness and accuracy of the related information materials. Under no circumstances does the content of this article constitute investment advice. There are risks in the market—invest with caution! No转载或抄袭 without permission!