Wine maker Australian Vintage has signed a distribution deal with China’s largest food processor, the state-owned COFCO, local media reported on Monday [25 August 2014]. The company’s core brand, McGuigan Wines, will soon become one of Australia’s highest selling labels in China within a newly established International Wine division of COFCO. The Australian company will join wine makers from Argentina, Chile, the United States and France, who are all vying for a higher share in the rapidly growing imported Chinese wine market…Full Article: The Global Times Aug 2014

Key Point

  • Prior to the deal, just 5% 5 of McGuigan’s total Australian Vintage sales were in China.

ChinaAg Comments

  • In early 2013, COFCO, China’s state owned grain conglomerate, expressed interest in purchasing Barossa Valley Estate (South Australia) and marketing the wine under its Great Wall brand. Unfortunately for COFCO, in April 2013, a New Zealand company won the bid to purchase the winery.
  • Australia, China’s second largest supplier of bottled wine after France. Australia’s high priced reds and whites generally originate from South Australia (i.e. Eden Valley, Wrattonbully, and Barossa Valley).
  • Founded in 1983 and based in Hebei province, Great Wall Wine is one of China’s largest wine enterprises in terms of annual sales and export volume. The company is wholly owned by China Foods Ltd., a subsidiary of COFCO Group that produces rice wines as well as grape wines under the brands “Junding” and “Great Wall”. In 2012, China Foods’ wine portfolio accounted for 57% of its net profit. Despite its high share, the company’s wine business has been suffering, with sales of Great Wall wines falling by 30% in Guangdong province alone in 2012.

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