The latest alcohol ban issued by the Chinese Communist Party in May is causing a series of ripple effects. It is not only devastating the catering industry but also impacting industries such as liquor, tobacco, designated driving services, tourism exhibitions, and more, resulting in widespread repercussions.
The revised “Anti-Waste Regulation” by the Chinese State Council clearly stipulates that public receptions, including those by state-owned enterprises and institutions, are prohibited from providing tobacco and alcohol. The ban has first hit the already struggling catering industry.
Recently, high-end hotels in many regions across China have resorted to setting up stalls on the streets to sell dishes in an attempt to save themselves. A blogger in Xinyang, Henan Province, mentioned that almost all major hotels in the area have set up stalls, offering similar dishes with slight variations in taste.
A restaurant manager in Liaoning expressed to reporters that the impact of this alcohol ban is even more severe than the pandemic. He stated that just as they were recovering from the pandemic and economic downturn, the summer has arrived, hoping to make some money, only to face another alcohol ban. The elderly have no money in hand to afford meals, while the wealthy officials do not share their wealth for dining out.
The China Alcoholic Drinks Association’s “Mid-Term Research Report on the Chinese Liquor Market 2025,” released on June 18, shows that the liquor industry’s situation in the first half of 2025 has not improved from the previous year, with overall operational indicators falling. The most significant negative impact is on operating profits, with nearly 60% of enterprises experiencing profit declines, and over half of distributors and retailers stating an increase in loss-making sales. Additionally, four out of ten retailers are facing cash flow pressures.
Manager Wu, who has been in the liquor industry in Inner Mongolia for 30 years, mentioned that since the implementation of the alcohol ban, both liquor and tobacco have been significantly impacted. Many major hotels they had long-term collaborations with have been frequently canceling orders recently, resulting in a backlog of unsold liquor.
“This year, it’s really tough to run a physical store, especially for us specializing in liquor, which has significantly decreased,” said Manager Wu.
Even the high-end liquor market is not spared from the impact. Prices of premium liquor brands like Wuliangye and Feitian Maotai have recently dropped again. On June 16, the wholesale price for a bottle of Maotai was reported at 1,930 yuan, and the wholesale price for a case had dropped to 1,960 yuan, marking a decrease compared to the beginning of the year.
According to a liquor wholesaler, Mr. Wang, the current business is notably poorer than before, with continuous losses, and Maotai being the most costly loss.
He revealed that he recently purchased 50 cases of Maotai, with each bottle causing a loss of over 200 yuan, leading to a loss of over 50,000 yuan for the 50 cases. He expressed concerns about pouring all the earnings from previous years into these losses if the situation continues.
Manager Liu, a distributor of Wuliangye, noted that in the past two days, the prices of Wuliangye have also been steadily declining. He worries that if this trend persists, Wuliangye might drop from the list of top liquor brands, leaving only Maotai in the high-end liquor market, which poses no benefit but harm to distributors.
While banquet bookings at restaurants have sharply decreased, the designated driving industry has almost come to a halt. Comments from designated drivers across different regions indicate that previously they could handle three to four orders a night or even more, but now the demand has significantly dropped, leading to some considering switching professions.
Observers believe that while the alcohol ban directly targets official receptions, seemingly affecting a limited population, this small group holds a strong influence in the consumption chain. The ripple effects caused by the alcohol ban are rapidly expanding, delivering a greater impact on the already fragile consumption market.