(Yicai) April 30 -- Kweichow Moutai has named Zhang Deqin, the head of its unit Guizhou Xijiu Investment Holding Group, as the Chinese liquor giant’s new chief. He is the fourth chairman since May 2018 and the first to rise up the ranks in the company.

Zhang will replace Ding Xiongjun, who took up the reins in 2021, Kweichow Moutai said, citing an instruction it received from its main shareholder, the provincial government of southwestern Guizhou province.

The price of Kweichow Moutai’s main tipple, the fiery Moutai alcohol, has not been stable recently, which is probably the main reason why the firm is changing chairman again, Xiao Zhuqing, a liquor industry expert, told Yicai.

The Chinese baijiu market has entered a slowdown after a boom period from 2015 to 2022. Although Kweichow Moutai’s main brand Feitian Moutai is selling well, its Moutai 1935 liquor is experiencing difficulties, Xiao said.

52-year-old Zhang, who joined the firm in 1995, has an excellent understanding of Kweichow Moutai’s history and business philosophy and needs to strike a balance between expanding direct sales channels and relying on the usual dealership channels after he assumes the post, Xiao said.

Kweichow Moutai’s direct sales account for nearly 50 percent of its revenue thanks to the former chairman’s efforts, Xiao said. But if the company continues to increase sales through direct channels, it may result in a boycott by dealers and damage the foundation of the firm’s sales network, he added.

Some dealers said they hope that Zhang, who is a veteran of the liquor industry, will take more factors into consideration when making business decisions.

Zhang served as chairman of the firm’s Xijiu rice wine from 2010 and has also worked as deputy general manager at Kweichow Moutai’s parent firm Kweichow Moutai Group for a while. Except for a three-year period from June 2019 to July 2022, he has always been part of the firm.

Zhang will need to tread carefully. Two former chairmen, Yuan Renguo and Gao Weidong, have ended up in jail for accepting bribes during their time in power. Yuan held the reins from 2000 to 2018 and Gao from March 2020 to August 2021.

Kweichow Moutai’s share price [SHA: 600519] closed up 0.06 percent at CNY1,705.00 (USD235) today after gaining as much as 1.4 percent earlier. The stock has lost 34 percent of its value since it hit a record high of CNY2,601 (USD359) apiece in February 2021.

Editors: Tang Shihua, Kim Taylor