In 2015, Luzhou Laojiao Co.,Ltd. Chairman Liu Miao made a bold promise to lead the company back to the top three in China's liquor industry. Now, ten years later, despite numerous efforts, Liu Miao's ambitious goal remains unfulfilled.

The battle for "third place" in China's liquor industry has never ceased.

In 2015, Liu Miao took the helm of Luzhou Laojiao Co.,Ltd. during its low period and declared the ambitious goal of "returning to the top three."

To achieve this objective, Liu Miao and his team tried almost every approach: price increases, product line consolidation, involvement in supply chain finance, and even cross-industry exploration beyond liquor business.

Over the past decade, the company's revenue has continuously climbed to new highs, yet it has never managed to reclaim the industry's third position.

2025 is a crucial year for Luzhou Laojiao Co.,Ltd.'s "top three aspiration," but at this critical juncture, the company has stumbled—2024 revenue growth plummeted to 3.19%, and the first half of 2025 saw negative revenue growth.

Under these circumstances, does Liu Miao still have hope to lead Luzhou Laojiao Co.,Ltd. back to the top three this year?

**Ten Years of Promises, Still Not "Back in Top Three"**

Luzhou Laojiao Co.,Ltd., as the only strong-aroma liquor to win "China Famous Liquor" for five consecutive sessions, is known as the "originator of strong-aroma liquor." In 2001, the company launched its premium product "Guojiao 1573," successfully entering the high-end market and forming the "Mao Wu Lu" (Moutai, Wuliangye, Luzhou Laojiao) triumvirate from 2005 to 2009.

The turning point came in 2010. Yanghe surpassed Luzhou Laojiao Co.,Ltd. with 7.62 billion yuan in revenue through nationwide expansion of its "Blue Classic" series. Since then, Luzhou Laojiao Co.,Ltd. has fallen out of the top three and never returned.

Under the impact of the plasticizer controversy and "restrictions on public consumption" policies, premium liquor experienced a cliff-like decline in 2014. Luzhou Laojiao Co.,Ltd.'s revenue plummeted from 10.431 billion yuan in 2013 to 5.353 billion yuan, nearly halving year-over-year. Meanwhile, Yanghe only declined slightly by 2.43% to 14.659 billion yuan, further widening the gap.

The following year, Liu Miao, who had worked at Luzhou Laojiao Co.,Ltd. for 24 years, became chairman. According to public records, Liu Miao joined the company in 1991 and held various positions including head of procurement, after-sales service, and planning departments, accumulating rich experience.

In his first year, Liu Miao announced the goal of returning to the top three and made it the core objective of the "13th Five-Year Plan" strategic planning.

Subsequently, Liu Miao began aggressive brand line cleanup: retaining only five major product series—"Guojiao 1573," "Century-old Cellar Age Liquor," "Tequ," "Touqu," and "Erqu"—and reducing product codes from 7,000 to 900, eliminating numerous low-end and marginal products.

He implemented a series of reforms. First was cleaning up the chaotic product lines, keeping only the five major series mentioned above. Except for these products, all other products bearing the "Luzhou Laojiao" name were discontinued. Products like U-jiao, Pearl of the Orient, and Qingxi Valley were most affected.

This approach quickly showed results. In 2017, Luzhou Laojiao Co.,Ltd.'s revenue returned to over 10 billion yuan, reaching 10.394 billion yuan, with growth exceeding 20% for three consecutive years from 2017-2019.

However, this growth rate still didn't return the company to the top three. In 2020, the final year of the "13th Five-Year Plan," Luzhou Laojiao Co.,Ltd.'s revenue was 16.653 billion yuan, up 5.28% year-over-year. During the same period, Yanghe's revenue was 21.125 billion yuan, leaving a gap of nearly 4.5 billion yuan. The goal of returning to the top three fell short.

Liu Miao didn't give up. Entering the "14th Five-Year Plan" (2021-2025), Luzhou Laojiao Co.,Ltd. continued pursuing the top three.

The 2021 annual report mentioned that the company formulated the "14th Five-Year Plan" strategic planning: the "136 Strategy," where "1" represents the firm goal of returning to the top three in China's liquor industry.

However, in 2022, Shanxi Fenjiu emerged as a dark horse with 26.21 billion yuan in revenue, defeating Luzhou Laojiao Co.,Ltd. (25.12 billion yuan that year), pushing it to fifth place. It wasn't until 2024, when Yanghe's performance declined significantly, that Luzhou Laojiao Co.,Ltd. returned to fourth place, but still trailed third-place Shanxi Fenjiu by 4.9 billion yuan.

Since last year, Luzhou Laojiao Co.,Ltd.'s growth momentum has been weakening. In 2024, its revenue growth dropped from previous double digits to 3.19%, and the first half of this year even showed negative growth at -2.67%.

Despite this, Liu Miao's slogans have become increasingly ambitious.

At the annual dealer conference in March 2025, Liu Miao announced the goal of "breaking through 100 billion yuan in liquor revenue and 1 trillion yuan in market capitalization." Currently, only Moutai has achieved 100 billion yuan in revenue among liquor companies.

**Price Increases, Finance, and Cross-Industry: Liu Miao's "Three Strategies"**

Returning to the top three is not only Luzhou Laojiao Co.,Ltd.'s obsession but also Liu Miao's. He frequently mentions returning to the top three in public. According to statistics, in 2018 alone, Liu Miao publicly mentioned returning to the top three at least seven times.

To achieve this goal, under Liu Miao's leadership, Luzhou Laojiao Co.,Ltd. made many attempts.

First was price increases. Luzhou Laojiao Co.,Ltd. can be said to be one of the liquor companies most fond of raising prices, earning it the nickname "price increase king."

After taking office, Liu Miao implemented "small steps, quick pace" price increases for core products like Guojiao 1573 multiple times. According to statistics, Luzhou Laojiao Co.,Ltd.'s products experienced over 10 price increases in 2022 alone. Looking at a longer timeframe, Guojiao 1573 raised prices 9 times in 2016, with three major products increasing prices nearly 10 times throughout the year. In 2017, Guojiao 1573 also underwent 9 adjustments.

Since 2015, Guojiao 1573 has raised prices more than ten times, with the most recent increase in August 2023, bringing the factory price to 980 yuan per bottle, exceeding the 969 yuan factory price of Feitian Moutai at that time.

While price increases can indeed boost company revenue, relying on price increases for profit is not a sustainable business strategy and can bring unpredictable side effects.

In recent years, Guojiao 1573 has fallen into price inversion. In December 2023, the market wholesale price of Guojiao 1573 was only 875 yuan per bottle. This year, the wholesale price dropped to 840 yuan per bottle, and with e-commerce subsidies, it even fell below 800 yuan. Dealers lose 100 yuan per bottle sold, creating serious price inversion.

Besides price increases, during Liu Miao's tenure, Luzhou Laojiao Co.,Ltd. made another controversial move—"liquor-related lending."

In March 2023, Longma Xingda Microfinance Company under Luzhou Laojiao Co.,Ltd. launched three financial products: "Liquor Dealer Loan," "Liquor Enterprise Loan," and "Liquor Personnel Loan," providing loans to upstream and downstream suppliers, dealers, and quality individual customers respectively.

In Longma Xingda's product line, there's a product called "Pickup Rights Pledge." According to the official website: Luzhou Laojiao Co.,Ltd. dealers use pickup rights or future pickup rights for Luzhou Laojiao series products as collateral to apply for loans from the company.

Regarding this, the outside world believes that part of Luzhou Laojiao Co.,Ltd.'s borrowed funds might be used to lend to dealers for purchasing goods, essentially lending money to dealers to buy their own liquor, using loans to help dealers purchase liquor for inventory reduction.

Luzhou Laojiao Co.,Ltd. indeed faces significant inventory pressure. In 2024, the company's inventory scale increased by 15.2% year-over-year, with inventory book value of 13.393 billion yuan. In 2020, its inventory book value was only 4.696 billion yuan, nearly tripling in four years.

Inventory turnover days also extended from 1,092.23 days in 2023 to 1,157.93 days in 2024, further increasing inventory accumulation time, far higher than other liquor companies' inventory turnover days.

However, Luzhou Laojiao Co.,Ltd. denies lending to dealers. Liu Miao stated at the 2023 performance briefing that the company has no loans to dealers through related parties or any other means, emphasizing that internal controls have been reviewed by auditing institutions.

Actually, many liquor companies have provided loans to dealers through cooperation with banks and financial institutions. For example, in 2019, Jinhuijiu cooperated with Industrial and Commercial Bank of China Gansu Branch to provide loans to small and medium dealers. In 2020, Jiuguijiu's Neican Liquor Sales Company cooperated with China Construction Bank to provide special loan guarantees for dealers.

The controversy surrounding Luzhou Laojiao Co.,Ltd.'s "liquor-related lending" arises because during the liquor industry adjustment period, Longma Xingda lending to dealers who already have cash flow difficulties using pickup rights and orders as collateral is suspected of disguised inventory pushing to dealers.

Besides price increases and lending, to find new growth curves, Liu Miao also promoted Luzhou Laojiao Co.,Ltd.'s series of diversified business attempts.

As early as 2016, Luzhou Laojiao Co.,Ltd. collaborated with Scent Library to launch customized perfumes. The "Wanwei Perfume" launched in 2017 suddenly became popular after being reviewed by beauty bloggers four months after going online. The 30ml perfume originally priced at 139 yuan was once scalped to 999 yuan.

However, Luzhou Laojiao Co.,Ltd.'s perfumes now have very modest sales on e-commerce platforms like JD.com and Tmall, with lukewarm response.

Of course, Luzhou Laojiao Co.,Ltd. has also launched food and beauty products. During "Double 11" in 2019, it collaborated with Zhong Xuegao to launch ice cream called "Duanpian" (Blackout), and in 2020 cooperated with Lao Zhongyi Cosmetics to launch distillers' grains face masks.

However, from the perspective of performance contribution, "other income" in Luzhou Laojiao Co.,Ltd.'s 2024 annual report accounts for less than 1%, so these products contribute almost nothing to the company's goal of reaching the top three.

**Critical Year for "Top Three Competition": How Realistic Are the Dreams?**

2025 is the final year of the "14th Five-Year Plan." Can Liu Miao lead Luzhou Laojiao Co.,Ltd. back to the top three?

From the first half performance, achieving the goal of returning to the top three this year is extremely difficult. From first-half revenue scale, Luzhou Laojiao Co.,Ltd.'s revenue was 16.454 billion yuan, while Shanxi Fenjiu's revenue was 23.964 billion yuan, a difference of 7.51 billion yuan. At the end of 2024, this gap was 4.9 billion yuan.

From revenue growth rates, Luzhou Laojiao Co.,Ltd.'s first-half revenue growth was -2.67%, while Shanxi Fenjiu maintained positive growth at 5.35%.

Whether in revenue scale or growth rate, Shanxi Fenjiu clearly leads Luzhou Laojiao Co.,Ltd.

Yanghe, currently ranked behind it, hasn't been left far behind either. Although Yanghe's growth rate plummeted 35% in the first half of this year, the revenue gap with Luzhou Laojiao Co.,Ltd. is less than 2 billion yuan. In other words, Luzhou Laojiao Co.,Ltd. not only struggles to catch up with Fenjiu but also doesn't have a very secure fourth position.

The above performance data represents the past. Liquor companies pay more attention to advance receipts, or contract liabilities growth, to measure dealers' payment enthusiasm.

Financial reports show that in the first half of 2025, Luzhou Laojiao Co.,Ltd.'s contract liabilities were 3.529 billion yuan, while Yanghe's were 5.878 billion yuan, and Fenjiu's were as high as 5.983 billion yuan. From this data, it's clear that Luzhou Laojiao Co.,Ltd. dealers' payment enthusiasm is not as strong as Shanxi Fenjiu and Yanghe dealers.

To return to the top three, Luzhou Laojiao Co.,Ltd. still needs new major products.

Shanxi Fenjiu has already validated this path. Starting from 2021, Shanxi Fenjiu achieved "two consecutive jumps" of 20 billion and 30 billion yuan in just two years, with "Qinghua 20" playing a crucial role.

Qinghua 20 achieved 10 billion yuan revenue in just 8 years from its 2015 launch to 2023, making it the fastest product to enter the "10 billion club" in the 300-500 yuan price range.

Currently, in Luzhou Laojiao Co.,Ltd.'s product line, the most promising product is 38-degree Guojiao 1573. Last year, the company revealed that 38-degree Guojiao 1573's 2024 revenue approached 10 billion yuan, becoming the first 10-billion-level low-alcohol premium liquor product, accounting for half of the entire Guojiao 1573 series revenue, with low-alcohol liquor becoming core revenue support.

Performance is particularly outstanding in North China markets: in Hebei market, 38-degree Guojiao accounts for 80% of Luzhou Laojiao Co.,Ltd.'s sales; in Jiangsu and Shandong, for every 10 bottles of Guojiao 1573 sold, 8 are 38-degree Guojiao 1573.

During the liquor industry's deep adjustment period, low-alcohol liquor is indeed growing against the trend. With the rise of young consumer groups, demand for low-alcohol and healthy drinking continues to be released. China Alcoholic Drinks Association data shows that the low-alcohol liquor market scale broke through 74 billion yuan in 2025, with an annual compound growth rate as high as 25%.

Low-alcohol liquor undoubtedly opens a new window for traditional liquor companies, but it's more of an attempt by traditional liquor companies during the industry adjustment period. Chinese consumers' perception of low-alcohol liquor is still mainly traditional categories like beer and pre-mixed drinks. Changing consumption habits requires a long cultivation process. In the short term, it seems unlikely that Luzhou Laojiao Co.,Ltd. can replicate Shanxi Fenjiu's growth path with low-alcohol liquor.

Therefore, Luzhou Laojiao Co.,Ltd.'s goal of returning to the top three this year will likely fall short again.