A regional liquor distributor backed by Chinese supply chain giant Eternal Asia is teetering on the brink of collapse, as mounting debts, offloading of stock, and shifting retail dynamics expose deep cracks in its business model.
Chongqing Yifei Liquor Marketing Co., Ltd., a regional wine and spirits distributor with a stronghold in Chongqing, is said to be struggling with unpaid debts and poor operational performance. The company, a subsidiary of the Shenzhen listed Eternal Asia, is reportedly offloading inventory at discounted prices and failing to pay suppliers, prompting concerns across the industry.
According to publicly available court documents, Chongqing Yifei was designated as a judgment debtor on April 18, 2025, following a labour dispatch contract dispute involving RMB 1.41 million with a Human resources firm. Industry sources say this legal action adds to signs of trouble, with reports of overdue payments and widespread discounting circulating among trade partners.
Two wine distributors interviewed by Vino Joy News confirmed the financial difficulties. One source said the company has already entered liquidation proceedings and that some brand owners are preparing to adjust their distribution strategies. According to China’s corporate registry platform Tianyancha, Chongqing Yifei is still officially listed as “active.”
Who is Chongqing Yifei?
Once considered a major first-tier distributor in southwest China, Chongqing Yifei carried brands such as Moutai, Wuliangye, Luzhou Laojiao, Changyu, Great Wall and Pernod Ricard. In 2017, its annual revenue exceeded RMB 500 million (approx. USD 69 million), and it had ambitions to double that within three years by leveraging the city’s population of more than 30 million.
Its parent company, Eternal Asia, was established in 1997 in Shenzhen and is a leading player in China’s supply chain service industry, working with international brands such as Procter & Gamble, Unilever, General Electric and Philips. In 2024, the company reported RMB 77.6 billion (approx. USD 10.7 billion) in revenue and RMB 106 million (approx. USD 14.6 million) in net profit attributable to shareholders. Its business spans across 10 different countries and regions including Singapore, Hong Kong and the United States.
Eternal Asia entered the alcohol distribution sector in 2013 and rapidly expanded through strategic partnerships with Chinese wine and spirits producers. It launched a “380 platform” model, establishing branches in over 300 prefecture-level cities and forming joint ventures with local distributors. Chongqing Yifei was created as part of that initiative.
What Happened?
Chongqing Yifei’s troubles reflect broader headwinds facing China’s traditional supermarket liquor channels. The company previously supplied major supermarket chains such as Chongqing Department Store (重百), New Century (新世纪), and Carrefour — all of which once enjoyed strong local consumer bases.
Chongqing Department Store Co., which owns Chongqing Department Store and New Century, was ranked 16th in the China Chain Store & Franchise Association’s “2024 China Top 100 Supermarkets” list, with annual sales of RMB 8.9 billion (approx. USD 1.2 billion) and 148 stores in Chongqing. The company also operates malls and auto dealerships and has long held a strong presence in the local retail sector.
However, both Chongqing Department Store and New Century operate on a traditional model that relies on collecting entry fees and barcode fees from suppliers in exchange for shelf space. These fees result in multiple layers of price markups, rendering products less competitive and poorly aligned with the growing trend of price-conscious consumption.
Some liquor distributors have used these channels to set inflated benchmark prices and then marketed “deep discount” sales via group buying platforms, disrupting price stability across the market.
“Chongqing Department Store and New Century have lost popularity in urban centres. While they still attract traffic in suburban districts, they are under pressure from new players such as Freshippo, revamped Yonghui stores, and on-demand delivery platforms,” one Chongqing-based distributor said.
In contrast, new retailers such as Freshippo, Sam’s Club and Aldi have eliminated entry fees and adopted direct procurement models focused on product turnover and performance metrics. These approaches are better suited to changing consumer demands and have helped increase market penetration.
Carrefour, once another major customer of Chongqing Yifei, has already exited the Chongqing market and is steadily retreating nationwide. Its adherence to the traditional fee-based retail model has failed to deliver a successful transformation.
“Traditional supermarkets are clearly in decline, but part of the reason also lies in fierce competition. Brands will ultimately stick with distributors that deliver results,” said one distributor who declined to be named.
Parent company shifts focus away from liquor sector
Adding to the pressure is the shifting strategic focus of Chongqing Yifei’s parent company. Eternal Asia has scaled back its investment in wine and spirits distribution in recent years. The company’s white spirits revenue dropped from RMB 6.37 billion (approx. USD 877 million) in 2020 to RMB 3.3 billion (approx. USD 454 million) in 2023. By 2024, the liquor segment was no longer listed as a standalone business in the company’s annual report — a clear sign of strategic de-prioritisation.
Eternal Asia is now focusing on “mass consumption, AI computing capacity, and new energy materials,” with alcohol distribution no longer considered core. Chongqing Yifei has also faded from public view. Its official WeChat account “Yifei Liquor” was last updated in October 2020, and its website has been taken offline.
The parent company’s withdrawal of support and resources may well be the final straw for Chongqing Yifei.
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