China's two biggest liquor makers, Kweichow Moutai and Wuliangye, reported declines in profits in the first half of this year, partly due to a government crackdown on lavish spending.
Wuliangye's net profits in the first half of the year totaled 4 billion yuan (649 million U.S. dollars), down 31 percent year on year, according to the company's interim report released on Thursday.
Its sales revenues during the same period were 11.66 billion yuan, down 25 percent year on year.
The Sichuan-based liquor maker attributed the drastic decline to market turbulence following the government's frugality campaign.
The Guizhou-based Moutai, dubbed China's "national liquor," performed better than its long-term competitor, Wuliangye, thanks in part to its price reduction strategy.
Moutai saw 7.23 billion yuan in net profits in the first half, down 0.25 percent year on year. Its sales revenues during the same period reached 14.32 billion yuan, up 1.37 percent from the previous year, according to the company's interim report released on Friday.
Moutai plans to invest 25 million yuan with partners to set up an e-commerce company to broaden its source of revenues, according to another Moutai report released on Friday.
Moutai has cut the price of its flagship product, 53 degrees Feitian Moutai, by half to less than 1,000 yuan per bottle to attract customers. The price cuts are meant to offset the negative impact of the government's frugality campaign.