(Yicai Global) Sept. 21 -- China’s wine market remains lackluster even after entering its usual peak season, as the pandemic continues to weigh on demand.

“Sales are even poorer than last year,” a purveyor of products made by Yantai-based Changyu Pioneer Wine, a well-known producer, told Yicai Global. Sales have fallen and inventories have risen amid weaker demand from local restaurants still suffering from the impact of closures due to Covid-19 epidemic this year, he said.

Wine sales around the Mid-Autumn Festival and the National Day holidays -- the traditional peak season -- are expected to fall by over 30 percent compared with previous years, as businesses have scaled back on company get-togethers and other activities because of Covid, according to Wang Wei, a wine importer in Tianjin, northern China.

Wang began selling other more popular alcoholic products, including craft beers and Moutai-flavored liquors, to help compensate for poor wine sales.

Weak demand is systemic in the wine market, and will likely remain soft until the first half of next year, Yang Zhengjian, dean of WBO Wine Business School, told Yicai Global.

Revenues increased at just five of the 12 listed wine companies in the first half of 2022, with only four reporting higher profits. Except for industry leader Changyu, others performed badly. Dynasty Fine Wines Group’s revenue sank 44 percent, while net profits at Citic Guoan Wine, Grace Wine Holdings, and Xinjiang Yizhu Wine plunged from 60 percent to more than 70 percent.

As a response to sluggish sales, Changyu has halved its annual target for some distributors in areas severely hit by Covid flareups, the purveyor noted.

Changyu General Manager Sun Jian told Yicai Global that to maintain a healthy inventory and improve its financial performance, the firm will adjust sales in some markets and expedite a series of reforms, such as focusing on mid-to-high-end products, restructuring its business division, and transforming its business digitally, rather than seeking growth by squeezing distributors.

Editors: Tang Shihua, Futura Costaglione