For years, Yantai Changyu Pioneer Wine Co. — China’s oldest and largest wine producer — has been regarded as the anchor of the country’s domestic wine industry. But the 130-year-old company’s latest results paint a starkly different picture. On April 17, 2026, Zhangyu reported full-year 2025 revenue of RMB 2.989 billion, a decline of 8.81 percent from a year earlier, while net profit attributable to shareholders collapsed 76.64 percent to just RMB 71.29 million — the first time its annual net profit has fallen below RMB 100 million in its 25 years as a listed company.

The decline was not sudden. Zhangyu’s performance deteriorated steadily throughout the year. The first quarter remained profitable at RMB 159 million, but profits tumbled to RMB 26.32 million in the second quarter, slid below RMB 2 million in the third quarter, and then swung to a staggering RMB 116 million net loss in the final three months — a loss that single-handedly crushed the entire year’s results. Wine, Zhangyu’s core product, saw revenue drop 12.25 percent to RMB 2.14 billion. Only the brandy segment posted a modest 2.55 percent revenue increase, but it was far too small to offset the damage.

The troubles at Zhangyu are not an isolated case; they are a mirror of the entire Chinese wine market. According to Chinese customs data, total wine imports in 2025 fell 26.85 percent year on year to roughly 207 million liters, and import value dropped nearly 11 percent to about USD 1.418 billion. Compared with 2019 figures, import volume has plunged by about two-thirds, and import value by more than 41 percent. Domestic production is in even deeper distress. Over the past decade, China’s wine output has eroded from over one million kiloliters to a mere 97,000 kiloliters in 2025 — a loss of 90 percent.

What’s happening to China’s taste for wine is not merely a cyclical downturn but a profound structural transformation. The market once revolved around business entertaining, luxury gifting and formal banquets. That model has collapsed. Government measures banning alcohol at official events, introduced in May 2025, along with an economy-driven squeeze on non-essential spending, have accelerated a shift from formal social drinking toward casual, home-based consumption. The 25-to-40 age cohort now dominates the market, and these consumers drink not to impress but for enjoyment — a “value-first” mindset that sidelines ostentatious labels and demands genuine quality. Traditional preferences are also changing: the long-standing dominance of dry red wines is giving way to lighter, easier-drinking options such as white wines and sparkling offerings.

For Zhangyu, the challenge is clear: it must navigate a market that has fundamentally changed beneath its feet. The company has responded in measured steps: management salaries have been cut by nearly 45 percent, operating expenses have been trimmed, and a modest share buyback program has been announced. But these moves — prudent though they may be — do little to address the deeper question of how a legacy brand anchored in a bygone era of wine consumption can win back consumers whose habits and expectations have been entirely reshaped.

The Chinese wine market, however, is not without hope. Growth is emerging in health-conscious segments: imports of low-alcohol and non-alcoholic wines surged sharply in 2025, and digital sales channels are expanding rapidly. Niche winemaking regions such as Ningxia have drawn growing attention for their quality and distinctive Chinese terroir. But for Zhangyu — and for China’s broader domestic wine industry — those green shoots will not translate into a turnaround without a fundamental rethinking of what Chinese consumers actually want wine to be. Until then, the country’s oldest winemaker will remain a vivid illustration of a market caught between what it was and what it is becoming.