Chinese producer spends $13.4m on Aussie vineyards

China’s Weilong Grape Wine Company has spent AUS$13.4 million on a number of Australian vineyards, as part of a plan to invest $120m in the country.

Weilong told the Shanghai Stock Exchange that it had agreed to purchase 484 hectares of vineyards around Mildura and Swan Hill in Victoria, along with another unidentified vineyard, and a further 605 hectares of land that could be developed, at a total cost of $13.4m.

It will also build a winery in Mildura capable of processing 60,000 grapes each year, as reported by Australian Financial Review. 

The investment is just part of the group’s long term plan to invest $120m in land and winemaking facilities in the country, having raised 600 million yuan ($120 million) through a share placement last week.

“This new plant in Australia will satisfy demand from Chinese consumers for higher quality wine,” Weilong said in a statement.

All the wine produced will be exported to China, where the company sells wine under the Grand Dragon label.

The Chinese mainland is now Australia’s second most valuable export market, up 50% in 2015/16 to AUS$419 million (£238 million).

Much of this growth has been attributed to China’s expanding middle class and the positive impact of a free trade agreement between China and Australia, which came into effect in December.

Under the agreement, the tariff on Australian wine exported to China will fall to zero by 2019 from 14% previously.