Liquor industry needs transformation

In order to deal with the crisis, high-end liquor enterprises began to transform, and most of them adopted the medium-low-priced wines. In the context of this industry, recently, 17 wine enterprises gathered in Beijing to sign and publish the “Declaration of Chinese Famous Wine 100 Words” and promised to practice corporate honesty and stick to the quality and value of famous wines. The adjustment of the liquor industry has led many wine companies to feel the advent of the industry in the winter. In particular, high-end liquor companies headed by Maotai have encountered greater sales resistance.

In the eyes of people in the industry, this is the first time in the liquor industry after the promulgation of the “prohibition of alcohol prohibition” at the end of December 2012.

Liquor industry enters adjustment period

Affected by factors such as plasticizers and Sangong consumption, the liquor industry is heavily affected. The data show that the year-on-year growth of winemaking industry in 2012 decreased by 7.75%, sales revenue growth decreased by 12.74%, and profit growth decreased by 5.52%. These data continued to deteriorate in the first half of 2013. Affected by the sluggish industry, the performance of half-year liquor companies fell sharply.

Liquor statistics show that the results of the company announced that, in addition to a slight increase of 10% in Yanghe shares, the licensing card, alcoholic drinker pre-reduction, Huangtai wine for the first time loss. Among them, alcoholic liquor in the first half of the performance dropped by nearly 90%, Haopai willing to notice the company's net profit fell by 80%.

Alcoholic liquor said that due to the liquor industry entering the adjustment period, the company’s income dropped sharply in the first half of the year, resulting in a sharp drop in profits of 87%-89%. In the same way, Yipai also said that in 2013, due to the impact of the control of the three public consumption and the “prohibition of alcohol prohibition” by the Central Military Commission, the company’s sales of high-end products declined, resulting in a decrease in company’s operating income and net profit. At the same time, the company increased efforts in product promotion and sales, and the sales expenses increased substantially compared with the same period of last year, resulting in the company's net profit decreased compared with the same period of last year. Net profit for the first half of the year is expected to decrease by 80% year-on-year.

In the eyes of the industry, the decline in the performance of liquor companies is an indisputable trend, but some companies will adjust their profits based on advance receipts. The middle income statement is more attractive, and some companies are all bad news. Released, and strived to use the sales season in the second half of the year to add luster to the company's full-year results.

However, for second-tier liquor companies, the decline in first-line liquor prices has squeezed the profit margins of second-tier wine companies. While Sangong consumption suppresses high-end liquor, some local wines have benefited. In such a market space, second-tier wine companies do not seem to see the future. For famous liquor companies in the liquor industry, how to break through the current background of industrial adjustment has become one of the issues they are currently considering.

"China's famous wine enterprises as a leader enterprise group need to face the reality and face problems and challenges." Wang Yancai, chairman of the China Wine Association, said.

Transformation to promote the return of famous wine value

“The dilemma encountered in the liquor market has forced companies to make two changes. One is to deepen and refine the market, deepen the regional market, and tap the market space. The second is to promote the return of liquor consumption to the origin and to return liquor to the essence of consumer goods. It exists as a consumer symbol," said Lu Tong, president of Fenglian Group.

In fact, as a beneficiary of the industry transformation, Fenglian Group has acquired Wuling Wine, and Wuling Wine has also achieved a year-on-year increase in performance. Data show that in 2012, Wuling Wines achieved an increase of 70% in revenue. In the first two months of the 2013 “prohibition of alcohol prohibition”, Wuling Wine still achieved a 100% increase in revenue.

“The return of liquor consumption to rationality proves that the medium-term strategic choice of Fenglian Group is correct. The attractiveness and adaptability of our brands and products to channel providers have been significantly improved compared to the previous. Seize the opportunity of industry adjustment, the company’s regional brands and The sub-divided mid-range liquor will be better developed, this is a good opportunity." Lu Tong told reporters.

The data show that the 17 famous wines were selected by the national wine tasting, including Maotai, Fenjiu, Wuliangye, Yanghe, Jiannanchun, Gujing, Dongjiu, Xifeng, Luzhou Laojiao, Quanxing, Shuanggou, Yellow Crane Tower and Langjiu. Wuling, Baofeng, Songhe, Qipai, etc. accounted for more than one-third of the Chinese liquor market. At the same time, it has a profound consumer base and a strong brand influence, which affects the development of the Chinese liquor industry to some extent. . Among the 17 famous wines of China, there are nine famous Luzhou-flavored wine enterprises represented by Wuliangye, and only three Maotai-flavored wine enterprises, ie, Kweichow Moutai, Sichuan Langjiu and Hunan Wuling, known as “Mao Wulang”.

In September 2012, Fenglian Group of Legend Holdings announced that it had achieved a wholly-owned merger and acquisition of Wuling Wine. Under the support of abundant financial support, mature business model, and excellent corporate culture, Hunan Wuling Diemang Strategy has gradually emerged. In the background of the overall weakness of the liquor industry in the second half of last year, Wuling Wine still maintained a good momentum of growth. “Wuling wine industry has entered Fenglian for more than a year. When the industry encounters criticism, Wuling wine industry has become the social value of the liquor industry with its own name, and has driven local economic growth with its own development, creating a large number of job opportunities and wealth.” The person said.

According to industry sources, 17 famous wine companies account for over one-third of China's liquor market, which greatly affects the development direction of China's liquor industry.