VATS Liquor, China’s first A-share–listed liquor distributor, said it expects to post its first full-year loss as falling alcohol prices and inventory write-downs weigh on earnings, highlighting continued weakness in the country’s drinks market.
The company said in an earnings warning issued on Jan. 30 that it expects a net loss attributable to shareholders of between RMB 320 million and RMB 433 million (about US$44.4 million to US$60.1 million) for the 2025 financial year. The result would mark a sharp reversal from a net profit of RMB 44.45 million a year earlier.
VATS Liquor distributes branded alcoholic beverages and is a major distributor of leading Chinese baijiu brands including Moutai and Wuliangye. It also represents international wine brands such as Lafite and Penfolds. The company has appointed Alun Griffiths MW as its international business director, making it the first liquor distributor in China to hire a Master of Wine.
According to its website, VATS Liquor partners with major supermarket chains including Metro, Walmart, Sam’s Club, Freshippo and China Resources Vanguard. It operates more than 2,000 self-owned retail outlets and runs a nationwide omni-channel sales network. The company is also included in Vino Joy News’ China Top 100 Wine Importers ranking.
In its filing, VATS Liquor attributed the expected loss to prolonged weakness across the alcohol industry. Market prices for its core portfolio of premium spirits continued to decline during the reporting period, dragging down revenue and putting pressure on margins. The company also increased provisions for inventory impairment based on year-end stock levels and changes in market prices.
The impact of falling prices had already surfaced earlier in the year.
In its interim report, VATS Liquor said it booked RMB 55.77 million in asset impairment losses in the first half of 2025, largely due to declines in premium baijiu prices. The amount was nearly equal to the company’s net profit for the same period.
Losses widened further by the third quarter. VATS Liquor reported a net loss attributable to shareholders of RMB 199 million for the first nine months of the year, citing changes in the economic environment and weaker consumer demand. A company employee told Vino Joy News that discounted sales used to clear inventory had also contributed to the losses.
The latest earnings warning confirms that the losses extended through the full year. Based on the nine-month results, VATS Liquor’s loss for the fourth quarter alone is estimated at between RMB 121 million and RMB 234 million.
Price pressure has been widespread across China’s alcohol market. As previously reported by Vino Joy News, several well-known wine labels, including Lafite, Latour, and Penfolds Bin 389 and Bin 407, saw market prices fall below reference levels in 2025.
In the baijiu sector, transaction prices for major brands such as Yanghe and Guojiao also dropped below official guidance prices. Even Feitian Moutai, long considered price-resilient with a recommended retail price of RMB 1,499 per bottle, at times traded at or briefly below that level during the year.
Against this backdrop, VATS Liquor, which had previously built up large inventories, was forced to sell some products at prices close to or below cost, further eroding profitability.
The company did not separately address its wine business in the earnings warning. However, its interim report showed that imported wine revenue rose 10.96% year on year in the first half to RMB 246.75 million, even as the broader market weakened.
Wine remains a small part of the company’s overall business. Imported wine accounted for 6.25% of VATS’ total revenue in the first half of 2025, compared with 91.97% from baijiu.
The performance of VATS Liquor’s wine business in the second half of the year will be detailed in its full annual report, which has yet to be released.
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