By Deborah Jackson, Editor National Liquor News
Australian Vintage Limited (AVL) has signed an agreement with Vintage China Fund LP that is expected to raise $16.5 million in capital for AVL.
The deal provides for the placement of 15 per cent of AVL’s existing capital to Vintage China Fund LP at a share price of $46.01.
The $16.5 million funds will be used to drive the global growth of AVL’s core brands, reduce its cost base and grow its presence in new export markets.
The exclusive distribution agreement will see the supply of AVL products, excluding the McGuigan Brand, into China. It will complement the company’s existing distribution agreement with COFCO W&W International Co.
As part of the placement deal, Vintage China Fund, LP Director, Dixon (Jiang Yuan) will become a director of AVL, joining existing Board members Richard Davis, Neil McGuigan, Perry Gunner, Peter Perrin, John Davies and Naseema Sparks.
The timing of the deal comes as demand for wine in China has never been greater, with the total value of Australian exports up 43 per cent to $568 million according to Wine Australia – making it the number one export market for Australian wine.
According to the CEO of AVL, Neil McGuigan, the consistent growth of online wine sales in China is one of the many reasons that enticed AVL to partner with Vintage China Fund, L.P.
“The opportunity for Australian wine in China is unparalleled and unquestionable, and if you want to be a key player in the market you have to invest in growing your brands and partner with like-minded businesses in order to make a meaningful impact.”
In other news Barossa Valley based Seppeltsfield will open the doors to an AUD $75 million new wine chateau in Henan Province, Eastern-Central China on Saturday 13 May.
Chateau Seppeltsfield Minquan will be the first Chinese chateau to have a part ownership stake by an Australian winemaker.
Having been in construction for three years, the chateau will be opened as part of a joint venture between Seppeltsfield Wines Pty Ltd and Minquan Jiuding Wine Company Ltd. It stands to become the most significant retail, tourism and storage outpost ever developed for an Australian wine business in China.
The joint venture relationship will provide Seppeltsfield with storage and bottling facilities in mainland China, whilst also enabling the sale of premium South Australian wine to Minquan Jiuding, for co-brand partnerships.
Seppeltsfield Proprietor & Executive Chairman, Warren Randall said: “Whilst the Minquan partnership will provide Seppeltsfield with key logistics facilities, what is exciting is that Zhengzhou is a significant interchange city, particularly for rail.
“With Shanghai now also just a few hours away by high speed train, we see Minquan moving from being largely an industrial county, to being easily accessible to a very large populous. Wine and wine tourism for most Chinese is still very new, so this is also about having some vision and being opportunistic.”