Even as Chinese companies gobble up Australian food and beverage manufacturing interests, one Australian wine maker has reversed the tables by buying up a Chinese concern to expand its market.
South Australia-based wine producer and distributor Accolade Wines has moved to strengthen its presence in China, by buying a majority stake in a Shanghai-based wine distribution business.
Accolade Wines CEO Troy Christensen said the acquisition of Shanghai CWC Wine Trading Co Ltd, would strengthen the wine maker’s platform in China and provide a springboard for its expansion into China’s fast growing wine market.
“We already have an established relationship with the business which has been distributing Accolade Wines’ products in China and Mongolia for many years, but we will now be in a position to extend our presence in the market,” he said.
According to the company’s Asia manager Freddie Choong, the acquisition would give Accolade offices in Shanghai and Beijing, from where it expects to rapidly build its market position.
“As Chinese wine consumers are now rapidly exploring the world of wine, this acquisition ensures we are well-placed to provide an exciting suite of wines from icons through to premium and commercial wines,” Choong remarked.
A swelling market
A recent joint study from Vinexpo and the International Wine and Spirit Research (IWSR) showed that China is now the fifth largest wine-consuming nation.
The data showed a growth of 33.4% in the consumption of still, light and sparkling wines in China between 2009 and 2010 and noted that in 2011, 156.19 million 12-bottle cases were consumed.
China Market Research (CMR) data suggests growth between 20%-30% is set to continue over the next five years.
Accolade Wines refused to disclose the financials of the deal, but did say that Shanghai CWC’s management, including CEO Bong Ha, would be retained to streamline the process of distribution into China.
“The company [post the merger] now has the capacity to not only offer its existing wines to Chinese consumers but to work with us to develop wines specifically for the Chinese market,” said Ha.
Accolade, which employs 1800 people worldwide, is the biggest wine company by volume in the UK and Australia. It was formed in early 2011 when US Company Constellation Brands sold a majority stake in its division Constellation Wines Europe and Australia to CHAMP Private Equity.