Penfolds buys Chinese winery for nearly $30 million
Treasury Wine Estates hopes to create a Chinese home for Penfolds in the heart of the nation’s premier wine region following a multi-million winery purchase.
The parent company of South Australian wine icon Penfolds has acquired a 43-hectare luxury vineyard and modern winery in the Ningxia region for $27.5 million.
ASX-listed Treasury Wine Estates said its 75 per cent acquisition of Ningxia Stone & Moon Winery Co. Ltd was consistent with the company’s strategy of investing in luxury vineyard and production assets.
The Ningxia wine region is in the central northern part of China and is characterised by its arid climate which has been compared to that of southern Australia. It has become famous globally for its wine and is recognised as China’s first wine appellation.
The first wine grapes in the region were only planted in the 1980s, but Ningxia is now home to more than 200 active wineries.
Stone & Moon sits in the Qingtongxia production area of Ningxia and was founded in 2017. It specialises in Syrah, Viognier, Cabernet Sauvignon, Chardonnay and other varietals.
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Stone & Moon is in the Qingtongxia production area of Ningxia – China’s only wine appellation.
TWE said Stone & Moon would “complement its existing third-party sourcing arrangements to deliver an efficient and scalable production model for the Penfolds’ China country of origin portfolio”.
“Additionally, TWE intends to evolve the site in the future to create a local brand home for Penfolds, building on its strength as one of the leading Luxury wine brands in China.”
The deal is set to be complete in the first half of next year, and TWE has the option to acquire the remaining 25 per cent ownership after five years.
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TWE CEO Tim Ford said the announcement was a “significant step forward for TWE, and Penfolds, in China”.
“Through this acquisition, we will further strengthen our commitment to, and investment in, the China wine industry, where Penfolds continues to be a highly admired and sought after brand,” Ford said.
“The successful evolution of Penfolds to becoming a multi-country origin brand has been a significant execution highlight in recent years, with the China-sourced portfolio having resonated particularly strong with Chinese consumers, and we look forward to continuing that momentum through this important long-term investment.”
The news follows Treasury Wine recording a profit decrease of more than 60 per cent in FY24, having earlier in August announced the divestment of Wolf Blass, Yellow Glen, Lindeman’s and Blossom Hill.
But Penfolds was a major driver of revenue for the company in the last financial year, with earnings rising by 12.8 per cent thanks to the growth of its luxury portfolio.
Penfolds recorded $1 billion in net sales revenue in FY24 – a 22.1 per cent increase.
Shares in TWE are up 3.48 per cent to $11.89 per share in early trade today.
