China's baijiu market is slowly rebounding but not early enough for the peak season of Chinese New Year.

Sales of the popular upscale Chinese liquor have begun to pick up in Beijing and Shandong province since last weekend, Yicai Global learned. However, the period of stocking up coincides with a peak of surging Covid-19 cases so it is difficult for sellers to make up for the previous lull in sales, merchants predicted.

"A while ago, nobody responded to my inquiries," Wang Hu, a liquor seller in Beijing, said to Yicai Global, adding that the demand has started to bounce back. The food and beverage industry has been gradually picking up as more people have recovered from Covid-19, Guo Youchen, a retailer in Nanjing, told Yicai Global.

But merchants said that it would be hard to reach the same seasonal uptick as usual as sales are impacted during the early Spring Festival period as the timing coincides with a Covid-19 infection peak while courier services will stop for the upcoming seven-day holiday period starting Jan. 21.

The pandemic has affected supply and brand differentiation. Some retail outlets still have inventory after sluggish sales last year so they are not enthusiastic about stocking up more. Moreover, leading brands are becoming stronger.

In the first three quarters of last year, revenues of several big liquor brands including Moutai and Wuliangye, rose by 12 to 28 percent despite the weak market. Meanwhile, their net profits climbed between 15 and 45 percent. The advantage of leading baijiu brands during this round of recovery has been confirmed by several analysts.

Merchants said that they prefer to stay prudent when choosing between different brands and quantities while moving away from smaller brands whose prices have been rising rapidly in the past two years.