Over the past four years, 4.4 trillion yuan in market value of the baijiu sector has evaporated. Why is baijiu no longer sought after?
Last week, Duan Yongping said on Xueqiu:
"I am willing to bet 100 million RMB on Moutai against any domestic fund, with a 10-year time limit."
That same night, Dan Bin from Oriental Harbour responded:
"No need for bets, no need for gimmicks. Time is the fairest judge."
Though Dan Bin politely declined the bet, he made his stance very clear.
The Baijiu sector has undergone a prolonged slump over the past five years. The total market value of 19 listed Baijiu companies has shrunk from the 2021 peak of 6.7 trillion yuan to 2.25 trillion yuan, wiping out 4.4 trillion yuan.
The China Securities Baijiu Index has plummeted by nearly 70%, and the total output has declined for nine consecutive years, over 70% lower than its peak in 2016.
Once known as the "most resilient asset" in the A-share market, Baijiu has become one of the sectors with the steepest declines.
Two years ago, when the wholesale price of Feitian Moutai dropped by nearly 200 yuan per day and panic swept the market, Duan Yongping quoted Graham's old saying on Xueqiu:
"In the short run, the market is a voting machine, but in the long run, it is a weighing machine. So the market remains the same, and Moutai also remains the same."
Duan Yongping has said on more than one occasion:
"Looking back at this price 10 years from now, it will most likely seem just like looking at the price 10 years ago right now."
Duan Yongping bets his solid capital on his firm belief and the future, which deserves respect. Moutai is indeed an excellent company, with a gross profit margin of over 90%, hundreds of billions of yuan in cash on its books, and zero interest-bearing liabilities.
Duan Yongping still identified the right company, but he may have misread the era.
01 Drink happily, work diligently
Everyone knows that Moutai is valuable never because it tastes good.
Which table you sit at, what wine you drink, who raises the glass first, how low you clink your glasses — this whole set of unspoken rules has turned Moutai into the ultimate status symbol in Chinese social scenarios.
Besides representing social status, Moutai only rises in price and hoarding it is just like hoarding gold.
Moutai is still a company with great products and a strong brand. But a "good company" only supports a reasonable price-earnings ratio, rather than a 73x high premium built on the "Chinese-style business dinner" culture. In the past two decades, the wholesale price of Feitian Moutai has risen all the way from more than 1000 yuan to over 3000 yuan. "Hoarding Moutai" has become a kind of belief, considered more stable than holding gold.
But the value of "hoarding" is fading away.
At the peak of the craze in 2018, a bottle of Feitian Moutai could be sold for 3000 to 4000 yuan. Today, you can buy it for 2379 to 2829 yuan at third-party specialty stores on JD.com, with the mainstream transaction price hovering around 2450 yuan.
It has dropped by more than 30% in just a few years.
Though the Chinese zodiac Moutai of the Year of the Sheep still sells for 20000 to 30000 yuan, and the prices of 30-year and 50-year vintage Moutai remain firm. Only a tiny number of top-tier scarce products are still seeing price increases. For regular vintage Moutai, the value of "hoarding" has already failed.
Over the past four years, Moutai's net profit has increased by 57%, but its share price has dropped by 53%. The losses are the two layers of premium brought by "social status" and "hoarding", and the core of Moutai's high premium is rooted in the "Chinese-style drinking party" culture.
The drinking party culture has operated for thousands of years based on one premise: you have to please others to get things done, and others please you to get things done.
Information and resources are held in the hands of a small number of people. If you want to enter an industry or win a project without public access, you have to first find the person who controls the resources and propose a toast to him.
Alcohol is the best catalyst for relationships.
Moutai is the most expensive one in this scenario. Placing it on the table clearly tells the other party: I am fully sincere for this meal, and I am willing to pay this price for you.
But this premise is disappearing, as the barriers to information and resources are being dismantled layer by layer.
First came the mobile internet. Industry know-how, connections and resources that only a few people knew in the past are gradually leveled out by search engines and social platforms. If you want to learn about an industry, you can find relevant information online, and you no longer need to rely on "guidance from seniors" at business dinners.
An ordinary person without any background can accomplish many things with just a smartphone, platforms like Douyin, official accounts, and Xiaohongshu.
Then comes the AI era. When experience and knowledge become nearly free, the barrier that once had to be crossed by toasting collapses more thoroughly.
Li Xiang mentioned an incident in *The Crossroads of Luo Yonghao*: Some colleagues who used to be poor at expressing themselves and could not get access to many resources have extremely sharp minds. After using various AI tools, they can create greater value as long as sufficient tokens are available.
The change happening in one company is the same change taking place in the whole society.
In the past, many problems were solved by drinking alcohol, and many things that could only be promoted by connections and personal favors no longer need to be done that way. Whether a problem can be solved depends on personal competence, rather than just drinking alcohol.
If you lack the competence, drinking more is useless. If you have the competence, you can get things done even without drinking.
Some people say young people do not drink Baijiu now just because they are not old enough. When they enter the government system or take management positions in their 30s, they will naturally start drinking.
But alcohol tolerance does not grow on its own when you reach a certain age. What really changes is not people, but the era. When this generation really reaches that age, the era where you have to rely on drinking to get things done may have already gone.
People are still drinking alcohol, and people still gather for parties.
It is no longer the old set of rules with fixed seating arrangements and strict toasting orders. Instead, it is a small gathering of three to five close friends, drinking casually. You drink if you feel like it, and you do not drink if you do not want to. There is nothing wrong with getting completely drunk, and drinking has shifted from "socializing" back to "reuniting with friends".
02 It is not just China, the whole world is experiencing the ebb
It is not just China, global spirits giants are all experiencing the industry downturn.
More than 50 listed alcohol companies tracked by Bloomberg have seen their total market value wipe out 830 billion US dollars over the past four years.
Diageo from the UK, which owns well-known brands including Johnnie Walker and Guinness, has seen its share price drop by nearly 60% from its 2021 peak, with its market value shrinking from 90 billion pounds at its peak to 37.5 billion pounds, returning directly to the level of 2012.
Pernod Ricard from France has also dropped by 60% from its 2023 high, with its price-earnings ratio falling from 62x to 15.6x. The market value of Rémy Martin and Brown-Forman has also declined across the board.
It is not just the market value that has dropped, but also the sales volume.
Global spirits sales have fallen by 4%. What is notable is the structure: sales of ultra-premium spirits have directly dropped by 15%, far steeper than the overall market decline.
This structure shows that over the past decade, the global spirits industry relied on the narrative of "drink less, but drink more expensive" premiumization, and this narrative is now backfiring.
The more expensive wines that are propped up by "social status" and "identity" have experienced the steepest declines.
Wines for daily drinking are relatively more stable. The proportion of drinking population in the United States has dropped to the lowest level since 1958. More and more people regard "drink less, or do not drink at all" as a new kind of decency.
Young people in the United States are the same. They do not stop drinking, but they have changed their way of drinking. Tequila sales have risen by 16.9%, and ready-to-drink cocktail sales have increased by 20% to 30% per year.
What has been abandoned is the tasting logic of "barrel aging, vintage, flavor" for whiskey and cognac.
The consumption of Scotch whiskey and cognac among people aged 18 to 30 has dropped by 35% compared with 2019, and the average age of the core consumer group of this type of wine has exceeded 50.
This set of tasting logic, just like the "flavor type, cellar aging" concept of Baijiu, is backed by a set of power system: you have to hold back first, and then a senior teaches you what makes the wine good.
Young people do not want a ritual that requires them to be educated. They just want to get pleasantly tipsy. Why does Tequila buck the trend and rise? Because it is inherently free of "patriarchal vibe": you just add lemon and salt, and drink it in one gulp, no need to understand vintage and barrel aging.
Even the collection and investment of whiskey is ebbing.
The auction price of high-vintage The Macallan has dropped by more than half in four years, and the price of its core products has dropped by up to 42%. This is the same thing as the collapse of "hoarding" in Chinese Baijiu: when the belief that "the longer you store, the more valuable it is" and "the older, the more distinguished" is no longer recognized, wine returns to its original nature.
Around the world, the value of wine never comes from the wine itself, but from its function of "expressing identity and maintaining relationships through drinking". When this function is weakened across the globe, wine prices all over the world fall together.
03 After the ebb, K-shaped differentiation
After the ebb, what is left for the Baijiu industry?
The answer is very simple: drink for pleasure.
The market for unbottled plain liquor with no fancy packaging and priced at dozens of yuan per bottle has reached 200 billion yuan, and is still growing at a double-digit rate every year. Only Fenjiu's plain bottle product sells 12 billion yuan a year, more than 200 million bottles. The Huanggai plain bottle Fenjiu has become the new base liquor. The younger generation mixes it with jasmine tea, adds honey and ice to make a cup of "Fen aroma jasmine". Mix it with lime and soda water to make a cup of "Chinese style Mojito". Some people even add a handful of osmanthus and rock sugar into the bottle, leave it for three days, and make a bottle of amber-colored "Osmanthus Fenjiu".
All these drinking methods are created by consumers themselves. The brand new "Osmanthus Fenjiu" formula has driven the monthly sales of Huanggai plain bottle Fenjiu to increase by 300% year on year, and the proportion of users aged 18 to 30 has risen from 12% to 45%.
Young people are not stopping drinking, they just do not drink at formal business tables.
They spend dozens of yuan on a bottle of pure grain liquor, mix it into the flavor they like, drink with people they want to see, drink when they feel like it, and do not drink when they do not want to.
No premium is needed, no ostentation is needed, only the pleasure brought by alcohol.
The sub-premium Baijiu priced from 300 to 800 yuan cannot match the status of Moutai, and cannot offer the cost performance of plain bottle Fenjiu. This segment has experienced the steepest decline: the profit of Jiuguijiu has dropped by 90%, that of Shuijingfang has dropped by 70%, and that of Shede has dropped by 30%.
The price range of 500 to 800 yuan is the segment most impacted by the contraction of government consumption.
But in the sub-premium segment, Fenjiu's Qinghua 20 achieved 12 billion yuan in sales in 2025, and its growth reached 20% to 40% in the most mature nationalized markets including Jiangsu, Zhejiang, Shanghai, Guangdong and Fujian, relying on the demand of "drinking more practically" in wedding, banquet and business scenarios.
With this full-coverage strategy covering high, medium and low end products, Fenjiu became the only listed Baijiu company that achieved double growth in revenue and net profit in 2025, and was called "the lonely exception" by securities firms.
The high-end segment is also experiencing differentiation.
Wuliangye is the second largest high-end Baijiu brand after Moutai, but the price of its core product Puwu can no longer hold up the official suggested retail price of 1499 yuan. On e-commerce platforms, you can buy it for just over 800 yuan via JD's 10 billion subsidy and Tmall Supermarket, and even for more than 600 yuan on Pinduoduo, nearly half lower than the suggested retail price.
In 2026, Wuliangye implemented its first disguised price cut in a decade, cutting the distribution price for dealers from 1019 yuan to 900 yuan.
Even with the decline of Moutai, the wholesale price of scattered bottles of Feitian Moutai still stays at more than 1600 yuan, which is much higher than the ex-factory price of 1269 yuan, and dealers still have profit margins.
This shows that the "high-end" label itself cannot guarantee safety: what can really withstand the impact is the top-tier symbol Moutai, while the price of the second-ranked Wuliangye has already collapsed and fallen far below the wholesale price, which is the most distinct manifestation of K-shaped differentiation.
04 Did Duan Yongping identify the right company?
Back to the original question: Did Duan Yongping identify the right company?
Moutai is still the same Moutai: great products, strong brand, good business — none of these have changed. What Duan Yongping bets on is something more long-term: as long as the rules of business banquets and exchanging gifts still operate, as long as people are still willing to pay for "social status" and there is still profit margin for "hoarding", Moutai will always remain the same Moutai.
The 4.4 trillion yuan that vanished from the Baijiu sector is not the disappearance of "value", but the evaporation of "premium". The market size of plain bottle Baijiu has reached 200 billion yuan, Fenjiu sells 200 million bottles a year, and young people mix it with