China's COFCO to buy Barossa winery and market wine under Great Wall label
- From: The Advertiser
- February 27, 2013
COFCO, the maker of Great Wall wines, plans to purchase a vineyard in the Barossa Valley. Source: adelaidenow
CHINA'S largest food company wants to buy a Barossa Valley winery and market the wine under its Great Wall label.
The bid is part of the global expansion plans of the Chinese government-owned conglomerate COFCO.The company's wines and spirits division has been buying wineries across the world in recent years, aiming to become a truly global wine producer.
After buying wineries in France and Chile, it is now targeting Australia.
Wine industry brokers Gaetjens Langley director Toby Langley said representatives from COFCO were in the Barossa looking at wineries about a month ago.
"Great Wall have been out in the Barossa, they've certainly been looking," Mr Langley said.
"I had meetings with them last year ... but they haven't done anything at this stage as far as I'm aware."
A report in Europe's pre-eminent alcohol industry publication The Drinks Business this week quotes COFCO senior manager Shu Yu as saying: "I think our next step will be Australia."
The report said he suggested the Barossa would be the preferred region.
The company is planning to release a range of wines branded by each wine-producing region.
"We will announce that Great Wall is not only China, and we will make a French Great Wall, a Chilean Great Wall and an Australian Great Wall," he said.
"You will probably find these wines in the market next year ... Great Wall will use global sourcing for the Chinese domestic market."
Australian winemakers have been aggressively increasing their exports to China, boosting them by 20 per cent last year to $165 million.
This makes China our third-largest export destination.
According to government body Wine Australia, China is also the biggest destination for bottled exports that are priced greater than $7.50 per litre.
While the market is growing very quickly, Great Wall's established distribution network gives it a huge advantage.
The company sells about 10 million cases of wine per year in China as well as other countries.
The Australian wine industry is still suffering because of a surplus of grapes, combined with the strong Australian dollar and increasing competition from other "New World" wine producers such as South Africa and Chile.
Premium producer Barossa Valley Estate was placed in receivership last month after running into financial difficulties. However, its receivers, McGrathNicol, intend to sell it as a going concern.
COFCO bought Queensland sugar company Tully Sugar for $136 million in 2011.
The Advertiser tried to contact COFCO Australia's chairman, Keith De Lacy, but was unsuccessful.
Mr Langley said there was also interest in Australian wineries from some other Chinese investors.
Any purchase by COFCO would need to be approved by the Federal Government's Foreign Investment Review Board, because COFCO is a government-owned company.
On Saturday The Advertiser revealed Qatari company Hassad Australia was in the process of buying prime farmland in SA.
Former South Australian senator Nick Minchin says, in a letter to The Advertiser today, that investment in Australian agricultural and resource industries by state-owned enterprises "raises quite serious issues".
GREAT WALL WINE
COFCO Group is China's largest food processor, manufacturer and trader.
It was founded in 1952 and was the Chinese Government's sole agricultural products importer and exporter until 1987.
It owns Great Wall, which is China's biggest wine producer, reportedly selling 10 million cases of wine per year.
Great Wall was founded in 1983 and is based in Hebei province in Northern China.
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