Chinese online retailer, YesMyWine, has bought a 15 per cent stake in winemaker Australian Vintage Limited (AVL), the parent company of the Tempus Two, McGuigan and Nepenthe brands.
YesMy wine is China’s largest online wine retailer.
The $16.5 million capital injection coincides with AVL entering into an exclusive distribution agreement with the Vintage China Fund to supply of specific AVL products into China.
Vintage China Fund is a new partnership with the South Australian-based winemaker established by the founders of YesMyWine.
YesMyWine director Dixon Jiang Yuan will also join the AVL board.
AVL crushes about 10 of Australia’s total annual winegrape production.
Chief executive officer, Neil McGuigan, said the new distribution deal would complement his company’s existing distribution agreement in China with COFCO W and W International, a division of big food processor, manufacturer and trader, COFCO.
He said consistent growth of online wine sales in China was one of the many reasons AVL was keen to partner with Vintage China Fund.
“The opportunity for Australian wine in China is unparalleled and unquestionable,” he said.
“If you want to be a key player in the market you have to invest in growing your brands and partner with like-minded businesses in order to make a meaningful impact.”
Vintage China Fund was the sort of long-term, strategic partner AVL needed to build sales outside its traditional markets.
“It will bring us closer to reaching the 1.3 billion people in China who aren’t currently being taken on the wine journey,” he said.
China is now Australia’s leading wine market, worth $568 million a year according to Wine Australia.
The Chinese market is growing by more than 50 per cent annually.
YesMyWine’s own e-commerce sales have grown 50pc in the past nine years.
The $16.5m raised with AVL’s share placement deal with Vintage China Fund will be allocated to capital projects grow its brand presence in new export markets, reduce the winemaker’s cost base and drive greater efficiency.
AVL, founded originally as McGuigan Wines in the NSW Hunter Valley in 1992, is one of Australia’s largest vineyard owners, operators, managers and third party contractors.
The company has more than 2700 hectares under vine and also sources grapes from other suppliers in the Hunter, the Sunraysia and Riverland regions of NSW and South Australia, and SA’s Barossa Valley, Adelaide Hills, Coonawarra, Eden and Clare Valley’s, McLaren Vale and Padthaway districts.
Andrew Marshall
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
