Summary of Key Points
This news report discusses how, after China Resources acquired Jingzhi Baijiu, it not only failed to improve the business but also fell into a vicious cycle characterized by frequent changes in management, erratic strategies, and declining performance. The root of the problem lies in the initial acquisition of only the subsidiary, while the brand and operational foundation remained with the parent company, preventing China Resources from implementing effective reforms. Worse still, other acquisitions in the liquor sector by China Resources (such as Jinsha and Jinzhi) were also unsuccessful, turning the entire liquor business into a liability.
1. Management Changes Like a Carousel, Disrupting Brand Building
Since China Resources took control of Jingzhi in 2021, management has changed at an unprecedented pace:
- In October 2021, Hou Xiaohai from China Resources became the legal representative;
- In October 2022, Gan Xiaofeng took over as both general manager and legal representative;
- Later, Hou Xiaohai and Wei Qiang resigned from their positions as chairman, replaced by Jin Hanquan from China Resources Beer;
- Now, Gan Xiaofeng has also left (for Shuijingfang), leaving the position of general manager vacant for over a month, and the founder Liu Quanping has officially stepped out of management.
Each change in leadership brought with it a new strategy: sometimes promoting "aged wines," sometimes attempting to use China Resources Snow Flower’s nationwide distribution network to sell Jingzhi’s products, and at other times focusing on "brand rejuvenation." However, no one was able to sustain a strategy consistently. Management spent all their energy on integrating teams and determining directions, resulting in a complete lack of continuity in brand building. Consumers, who had just associated Jingzhi with its distinctive "sesame aroma" flavor, were confused when the company started promoting high-end aged wines.
2. Erratic Strategies Leading to the Loss of Core Competitiveness
Jingzhi’s original strength was as a pioneer in sesame-flavored baijiu, and consumers associated it with that unique aroma. After China Resources took over, executives like Gan Xiaofeng tried to shift the company’s focus to high-end "aged wine" series, but this met with lukewarm market response. After all, customers bought Jingzhi for its distinctive flavor, so switching to a higher-end approach meant abandoning its core advantage.
In terms of distribution, China Resources hoped to leverage Snow Flower Beer’s nationwide network to expand Jingzhi’s market presence (for example, in Anhui), but this effort was unsuccessful. As a result, Jingzhi lost its established advantages and failed to establish a new direction, further blurring its brand identity.
3. Prolblems Arising from the Acquisition: Unclear Property Rights and Governance Disputes
The most fundamental issue was the unclear ownership structure. China Resources acquired only the subsidiary "Jingzhi Baijiu," not the parent company that owned the brand and operational assets. In essence, China Resources bought the "child" but the "parent" (the parent company) retained control of the brand and operational foundation. When China Resources tried to implement reforms, it faced resistance from the old shareholders and teams at the parent company due to a lack of coordination. When performance declined, both parties blamed each other, leading to growing distrust. The only solution seemed to be frequent management changes, which only perpetuated the cycle of problems.
4. China Resources’ Overall Weak Performance in the Liquor Sector: Jingzhi Is Not an Isolated Case
Jingzhi’s struggles are not unique; the same issues occurred with other acquisitions by China Resources, such as Jinsha and Jinzhi Baijiu:
- According to China Resources Beer’s 2025 annual report, the liquor business’s revenue dropped by 31% to 1.496 billion yuan;
- The company incurred a loss of 3.354 billion yuan, with 2.877 billion yuan stemming from impairment of goodwill (i.e., the excess cost associated with these acquisitions that proved to be unprofitable).
This indicates that China Resources may have made fundamental mistakes in its liquor business strategy from the outset, resulting in poor performance across the entire sector.
Conclusion
China Resources aimed to gain a share in the liquor market, but due to initial errors (such as unclear property rights), frequent management changes, and inconsistent strategies, it not only failed to improve Jingzhi’s performance but also suffered significant financial losses. To turn things around, China Resources would need to either clarify the ownership structure completely or invest even more capital in a risky attempt at recovery. However, the outcome remains uncertain.