China’s Wine Companies Struggle as Losses Deepen in 2025

China’s top wine companies are still losing ground in 2025, with flagship producer Changyu extending its slump and other  wineries from boutique Grace Vineyard to organic-focused Weilong reporting losses. Industry leaders warn that domestic wine continues to lag imports on price and quality, leaving the sector under pressure.

Changyu’s newly released interim report shows that in the first half of 2025, the company achieved operating revenue of RMB 1.47 billion (USD 205.9 million), down 3.40% year-on-year, while net profit attributable to shareholders fell 16.09% to RMB 185.6 million (USD 26.0 million). The company attributed the revenue decline mainly to lower sales volume.

As China’s largest wine producer, Changyu’s portfolio spans entry-level commercial wines to premium offerings and includes a significant brandy business. It also operates wineries in France, Spain, Australia, and Chile. Its sales remain primarily offline, relying on a distributor model that channels products through more than 5,000 distributors at home and abroad.

The company’s performance reflects continued weakness. In 2024, Changyu’s revenue and net profit plunged 25.26% and 42.68% respectively, its worst report in two decades. Against this backdrop, Changyu lowered its 2025 sales target to “not less than RMB 3.4 billion”, down from last year’s RMB 4.7 billion target. By the end of June, it had achieved only 43% of that goal, highlighting the ongoing pressure.

Changyu is not alone. Across China, wine producers from boutique labels to listed conglomerates have reported losses, underscoring how the country’s once-ambitious wine industry remains mired in a prolonged downturn.

For Wu Yunping, president of the Shenzhen Wine Industry Association,  the challenges are structural: imported wines remain cheaper and better quality, while domestic producers have often priced themselves out of the market. But he sees one area of promise.

“In recent years, many new wineries have emerged in China, but their products are often overpriced, and with vague business strategies, they struggle to achieve sustainable sales,” said Wu.

He added that while local governments often turn to associations like his to attract distributors, the industry remains reluctant. “I tell them, we can help promote, but we can’t guarantee buyers,” he said. “The cost-performance ratio of domestic wine is too low. A bottle priced at RMB 200–300 here is equivalent in quality to a wine sold for RMB 30–50 in Spain, which can then be resold for RMB 70–80. At that level, how can consumers be convinced to pay 200–300?”

More Losses

If Changyu still looks resilient, others are faring worse. Grace Vineyard, one of China’s earliest boutique wineries, reported a loss despite higher revenue. The company posted income of RMB 18.8 million (USD 2.63 million), up 42.5% year-on-year, but still booked a net loss of RMB 2.7 million (USD 385,000) attributable to shareholders. Losses narrowed compared with last year but profitability remains elusive.

Founded in 1997 by Hong Kong investor Chan Chun Keung in Shanxi’s Taigu, Grace Vineyard listed on Hong Kong’s Growth Enterprise Market in 2018. In recent years, it has faced mounting challenges. In 2024, it divested its whisky distillery, citing “major uncertainties.” Analysts widely viewed the move as an attempt to shed unprofitable assets and reduce financial strain.

Other players reported similar struggles. Weilong Grape Wine, listed in Shanghai and known for its organic focus, saw revenue fall 15.27% to RMB 187.0 million (USD 26.2 million), with a net loss of RMB 2.7 million (USD 372,000), reversing a profit in the same period last year. Mogao, a Gansu-based listed winery, reported a loss of RMB 32.7 million (USD 4.57 million). Loulan Winery in Xinjiang, quoted on the NEEQ, lost RMB 6.3 million (USD 882,000), widening its deficit. Another NEEQ-quoted winery in Ningxia, Farsight, reported a RMB 2.7 million (USD 380,000) loss.

A few companies managed to stay profitable, but only just. Among Hong Kong-listed companies, Tontine Wines and Dynasty Fine Wines both posted profits. Tontine, which focuses on sweet wines, turned a profit but only just — with net earnings of RMB 62,000 (USD 8,600). Dynasty earned HKD 8.17 million (USD 1.06 million), though that was down 56% year-on-year.

Still, Wu pointed to coastal regions where domestic dry whites are improving, selling for just a few dozen yuan with quality “not far behind imports.” That segment, he said, offers a rare bright spot in an otherwise troubled industry.

Coastal regions are producing competitive dry white wines, some priced at less than 100 yuan, with quality comparable to imports. “But overall, domestic reds still need significant improvement,” he said. “Otherwise, the decline is likely to continue in the coming years.”