The chill from China’s alcohol ban still hangs over restaurants and wine merchants alike. In Shaoxing, a riverside city in eastern Zhejiang Province famed for its centuries-old yellow wine, officials are trying something unusual to warm things up: paying people to throw banquets – the latest attempt to revive an ailing food-and-beverage industry battered by the policy’s spillover effects. 

Earlier this month, the city unveiled a 15-point Consumption Stimulus Policy that offers tiered subsidies to diners who host large gatherings in hotels. A banquet of five tables or more with a bill above 10,000 renminbi, about $1,380, can qualify for a rebate of up to 5,000 renminbi, or $690. Consumers apply by submitting hotel invoices to the local commerce bureau. Unlike previous programs, there is no time limit and no coupon lottery. The plan also includes vouchers for dining and cash rewards of as much as 200,000 renminbi ($27,500) for businesses that keep their doors open late.

“Catering is a core industry for employment, and this initiative is designed to further support restaurant spending,” said Shan Zilan, deputy director of Shaoxing’s commerce bureau. Officials stressed that the subsidies apply only to private banquets, not government spending.

Alcohol Ban’s spillover 

The policy comes in the wake of Beijing’s renewed austerity push. In May, the central government revised regulations to explicitly ban alcohol at all official receptions. Though intended for government functions, the ban quickly rippled outward. Some local governments tightened restrictions by barring civil servants from drinking outside of work, while many officials, anxious to avoid scrutiny, cut back on dining and banqueting altogether.

The impact has been severe. Data from the China Cuisine Association show that in the first half of 2025, national catering revenue growth slowed by 3.6 percentage points year-on-year, while revenue at large-scale restaurants fell by 2 points. In June alone, large-scale catering revenue dropped 0.4% compared with a year earlier. At the same time, the National Bureau of Statistics reported that alcohol prices fell 1.9% year-on-year in August and 2% over the January–August period.

State media have tried to counter the gloom. In July, a district Party secretary in Chongqing publicly hosted a private banquet to encourage spending, declaring that officials should “lead by example.” Shaoxing’s banquet subsidy has been seen in a similar light—as a symbolic gesture to counter the freeze in dining and alcohol consumption.

Symbolic More Than Practical?

Local media praised the measure as a boost to consumer confidence, but industry insiders are skeptical. “Banquets of more than five tables and over RMB 10,000 are mostly weddings or funerals,” said Shen Yi, a Zhejiang-based wine trader and former executive at a listed wine company. “These are held out of necessity. If there’s no occasion, people won’t host a banquet just for the subsidy. The policy is too narrow and won’t create broad demand.”

Online reaction has also been lukewarm. One Zhejiang commenter wrote: “This kind of policy may help temporarily, but not long term. Any industry must stand on its own. Subsidies can’t sustain it.” Another dismissed the measure as inconsistent and half-hearted.

Shen noted that the ban continues to weigh on the drinks sector. “High-end teahouses in Hangzhou are booming, because officials don’t dare drink in public. They meet over tea and snacks instead,” he said. “A civil servant friend of mine recently celebrated his birthday in a teahouse—there was no alcohol, and only two bottles brought discreetly by guests.”

Enforcement of the alcohol ban also varies widely. “Some places prohibit drinking even after work hours, while others only restrict it during the day. Most rules are communicated verbally rather than in writing. Many officials, to be safe, simply avoid drinking outside altogether,” Shen added. “That caution has delivered a huge blow to alcohol consumption.”