China’s alcohol market shifts toward casual drinking as business banquets fade

China’s beverage alcohol market is being reshaped by a long shift away from business banquets, gifting and official entertainment, opening space for younger drinkers, casual occasions and home consumption, according to new analysis from IWSR.

The research group said China’s total beverage alcohol volumes fell -4% in 2025, or -2% excluding baijiu, after another difficult year for the market. But it also pointed to growth pockets in imported white spirits, ready-to-drink products, premium beer and some parts of whisky, suggesting that brands aligned with new drinking habits may still find room to expand.

Shirley Zhu, IWSR’s China research director, said alcohol consumption in China is moving away from obligation and gifting and toward personal enjoyment, casual social occasions and value. She said the change is altering who buys alcohol, what they buy, where they buy it and how much they are willing to spend.

Younger legal-drinking-age consumers are driving much of that shift. IWSR said they are embracing casual drinking but remain largely absent from high-end wine and most premium brown spirits. Older consumers, meanwhile, have become more selective as business-related occasions have not returned to earlier levels.

The change is also affecting where alcohol is sold. In the on-trade, large venues have been losing ground to smaller bistros, cocktail bars, fusion restaurants and live music venues. Zhu said business dining, once the main engine of premium sales, has largely disappeared.

In retail, hypermarkets and supermarkets have weakened while convenience stores have gained share, helped by demand for smaller bottles and miniatures. Ecommerce continues to grow, especially through on-demand delivery services that bring drinks from local stores or small warehouses directly to homes. Zhu said common orders include cold beer, white spirits with mixers and ice, and bottles of wine or whisky.

Imported white spirits are among the clearest growth areas. IWSR said gin volumes in China rose +20% in 2025, while vodka and rum also posted double-digit gains from smaller bases. Zhu said gin is expanding across all price levels, vodka growth is concentrated in standard-and-below products with broad geographic reach, and rum gains are being led by white rum. Cocktail culture, home drinking and wider distribution into lower-tier cities are supporting those categories.

Whisky showed mixed results. Overall whisky volumes rose +3% in 2025, with Scotch down -1% and U.S. whiskey up +5%, according to IWSR. Japanese whisky and Irish whiskey both recorded double-digit increases from relatively small bases.

Scotch’s performance reflected a split market. Value blended Scotch volumes rose +41% in 2025 from a small base, while the larger standard tier increased +2%. Those were the only Scotch price segments to grow. Longer-aged products, especially bottles aged 18 years and above, continued to struggle as consumers traded down and inventories remained heavy.

Whisky may get some support from trade policy. In February 2026, China cut import tariffs on whisky from 10% to a provisional 5%, giving the category a short-term advantage over other imported spirits.

IWSR also pointed to the rise of domestic whisky production as an important development. More than 50 distilleries are now reported to be operating in China. The segment remains early-stage, but it could raise awareness of whisky more broadly even as it adds competition for imported brands.

Wine remains under pressure. Still wine volumes dropped -19% in 2025, with red wine falling by the same rate. White wine declined -14%, but its share of the market has grown to 9%. Zhu said red wine is facing a structural decline because of its close link to gifting and business occasions.

Sparkling wine offered a more mixed picture. Champagne volumes fell -15% in 2025, while non-Champagne sparkling wine edged up +1%. Zhu said sparkling wines are gaining traction at hotel brunches and in casual daytime settings.

She also highlighted South Africa as a possible beneficiary of changing trade rules after China cut import tariffs on South African wine to zero in May 2026. At the same time, domestic Chinese wine producers have been investing in quality improvements and winery tourism as a way to build consumer engagement.

Beer volumes fell -2% in 2025, but premiumization continued in selective form. The premium tier rose +7%, while standard-and-below beer declined -2%. IWSR said on-demand cold beer has become a major competitive area and that zero-sugar or low-calorie products are attracting health-conscious consumers. Zhu said some drinkers are moving up from value beer to standard products, while premium growth has been helped by aggressive promotions.

RTDs performed better than the broader market with flat volume performance in 2025. IWSR said affordability and variety helped support the category as consumers shifted from beer and wine into casual drinking formats. New products such as wine-based spritzers, tea-flavored drinks and beverages using regional ingredients have helped keep interest high.

Baijiu remains a drag on the overall market and is also being affected by moderation trends. IWSR said some products are now being bottled at 40% ABV or below instead of the traditional 50% ABV or higher.

Zhu said government restrictions on alcohol at official functions remain a structural headwind for premium spirits sold in bars and restaurants and are expected to persist through the first half of 2026. She added that one of the market’s defining challenges is attracting younger legal-drinking-age consumers to categories such as premium brown spirits and wine, where participation remains limited.