China’s Moutai Reports Slowest Profit Growth Since 2015

China’s most valuable liquor maker, Kweichow Moutai, has posted its slowest half-year profit growth since 2015, as rising marketing expenses and mounting receivables signal intensifying pressure on the country’s high-end alcohol market.

In its interim report released Aug. 12, the Guizhou-based baijiu giant said revenue for the first six months of 2025 rose 9.16% year-on-year to 91.09 billion yuan (US$12.68 billion), while net profit attributable to shareholders increased 8.89% to 45.40 billion yuan (US$6.3 billion). Both growth rates slipped into single digits — with profit growth marking the weakest pace in a decade.

Moutai, which employs more than 40,000 people and also produces wine in Hebei, is best known for its Feitian label, long regarded as the “hard currency” of Chinese liquor and a staple at top-tier business banquets. In the collectibles market, older vintages are coveted for their scarcity and sustained price gains.

For years, Feitian Moutai defied broader trends in the luxury drinks sector, holding its value even through the 2022–2023 economic slowdown, when prices for fine wines tumbled. The spirit’s official retail price is 1,499 yuan (US$208) per bottle, but wholesale prices have soared as high as 3,400 yuan. At the peak of market speculation, some traders predicted it could surpass 4,000 yuan.

That run ended last year. Prices have since fallen sharply, slipping below 2,000 yuan in recent weeks. According to Medoc1855 Trading Co., Ltd general manager Dong Huaicheng, wholesale prices now hover at about 1,860 yuan.

Adding to the pressure on liquor prices, China’s government in May expanded its ban on alcohol, cigarettes, and lavish dishes at official functions. The austerity push threatens to further erode demand at government banquets and corporate events. In a symbolic move, Moutai even swapped its signature spirit for blueberry juice at the buffet during its annual shareholders’ meeting that month, as we have reported.

The slowdown comes as marketing costs climb. In the first half, sales expenses surged 24.56% from a year earlier to 3.26 billion yuan, driven by heavier advertising and promotional outlays. Receivables doubled to 38 million yuan, mainly due to unpaid bills at a majority-owned subsidiary.

Analysts say Moutai’s challenge lies not in weakening brand appeal but in fewer business banquets amid a sluggish economy and tightened alcohol restrictions. “Moutai is mainly consumed at business dinners,” Dong said. “The drop in banquets and the recent drinking bans are the most fundamental reasons for the price decline.”

One bright spot was overseas demand. International sales jumped 31.26% year-on-year to 2.89 billion yuan, still a small share of revenue but growing at a pace that stands out in an otherwise subdued market.