Continuing to dispose of its non-Coca-Cola assets, China’s second largest winemaker has transferred its money-losing wine business to a unit under parent firm COFCO Corp. In a HK$5 billion ($649 million) deal, China Foods Ltd. has offloaded its prestigious Great Wall brand, including five production plants in China, five wineries in and outside the country, and the distribution of imported wines, the listed company said in a filing Monday to the Hong Kong Exchange…Full Article: Caixin Oct 2017

Key Point

  • China Foods stated it will focus on soft drinks where it controls a majority stake to produce and distribute Coca-Cola products in 19 Chinese provinces.

ChinaAg Comments

  • In August 2016, China Foods (subsidiary of COFCO) announced it may sell its stakes in 10 Coca-Cola bottling plants. China Foods’ Coca-Cola bottling operations are primarily located in northern China (e.g. Beijing and Hebei Province). At the same time, Swire Pacific manages 11 factories, including factories located in the provinces of Guangdong and Fujian.
  • In May 2015, COFCO announced plans to restructure its assets, including possibly merging China Agri-Industries and China Foods (also a listed COFCO subsidiary), before listing the restructured assets on a stock exchange.
  • 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.
  • In 2012, China Great Wall Wine’s sales of Great Wall wines fell by 30% in Guangdong Province. In addition, China Foods reportedly had a net profit of CNY 400 million (USD 64 million) for that year, far behind the CNY 1 billion (USD 160 million] projected for 2013.
  • Founded in 1990 and headquartered in Hong Kong, China Foods (a subsidiary of COFCO – HKG:0506) is a food processor known for its distribution of wine, soft drinks, edible oils, and candy. In 2012, China Foods’ wine portfolio accounted for 57% of its net profit.
  • 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”.

Hong Kong Trends

Similar Posts by ChinaAg

Spread the word. Share this post!