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Recently, the National Development and Reform Commission (NDRC) proposed comprehensive measures to address "involution-style" competition, drawing significant attention across industries.

According to Li Chao, an NDRC spokesperson, the Chinese economy is currently in a period of transitioning between old and new growth drivers, with new industries, business forms, and models emerging rapidly while traditional industries accelerate their transformation and upgrading. During this process, structural issues have indeed appeared in some sectors, where companies are trapped in "involution-style" competition characterized by intense price wars, counterfeiting, and substituting inferior products for quality ones. This severely distorts market mechanisms, disrupts fair competition, and necessitates intervention.

The liquor industry is not immune to such "involution-style" competition.

In recent years, the alcoholic beverage sector has shown a clear trend of structural polarization. Leading enterprises, leveraging their strong brand influence and extensive distribution networks, continue to solidify their dominant market positions. In contrast, the numerous small and medium-sized liquor producers are forced into a quagmire of homogeneous competition, often resorting to short-term tactics like copying packaging, aggressive discounting, and even false advertising to vie for limited market share. This polarization is particularly evident in several sub-sectors:

In online sales channels, low-priced products like "6 bottles of wine for 99 yuan" or "a bottle of baijiu for 9.9 yuan" remain prevalent. This not only severely disrupts normal market pricing mechanisms but also erodes consumer trust in the entire industry. The problem of follow-the-crowd capacity expansion is equally concerning: after the peak of the jiang-flavor baijiu trend, a flood of capital led companies to blindly expand production, resulting in significant overcapacity. Similarly, following the rise of the craft beer market, a deluge of "tea beers" and "fruit beers" flooded in, yet lacking genuine differentiation, they quickly fell into a vicious cycle of homogenized, low-price competition...

This irrational competitive dynamic is inflicting deep-seated negative impacts on the liquor industry. On one hand, it causes severe resource misallocation and efficiency losses, consuming vast amounts of capital and capacity in low-value, repetitive areas. On the other hand, this cutthroat competition model continuously weakens the industry's innovation momentum. Precious resources are funneled into the mire of homogeneous price wars rather than being invested in strategically significant areas like enhancing product quality, optimizing brewing techniques, or cultivating brand value. Such short-sighted behavior risks trapping the entire industry in a "low-end lock-in" development dilemma.

Therefore, systematic measures to curb "involution-style" competition in the liquor industry are both necessary and urgent. This not only concerns the regulation of current market order but will also profoundly impact the industry's future high-quality development landscape.

First, it will accelerate a deep industry reshuffle. The market will naturally eliminate small and medium-sized producers lacking core competitiveness, while forcing all companies to shift from low-end price wars to high-value quality competition, thereby driving overall industrial upgrading.

Second, it will promote a comprehensive upgrade in competitive dimensions. The previous extensive growth model, reliant on heavy advertising and channel inventory dumping, will become obsolete. Instead, enterprises will need to build a new competitive barrier integrating "brand value + cultural depth + technological innovation."

Third, it will optimize the efficiency of the entire industry chain collaboration. The industry will gradually reduce resource-wasting practices like excessive packaging and stockpiling of base spirits, shifting towards refined supply chain management. More innovative business models, such as wine tourism integration and immersive experiential offerings, are expected to become new engines driving industry growth.

It is noteworthy that comprehensive measures against "involution-style" competition must avoid "one-size-fits-all" approaches.

The liquor industry features distinct consumer tiers. While regulating low-end malpractices, the unique innovations of small and medium-sized enterprises should be protected. Regulatory focus should be on establishing long-term mechanisms for quality traceability, ecological and environmental protection, etc., rather than simply restricting competition. In the future, the liquor industry may form a "three-tiered pyramid" structure: top-tier globally influential leading brands, a middle tier of regional specialty producers, and a base layer of standardized products meeting mass consumption needs, with differentiated competition across levels.

Overall, while curbing "involution" may cause short-term pain, in the long run, it represents a crucial opportunity for the liquor industry to transform from scale expansion to value creation.