by Staff Writers
Pokolbin, Australia (AFP) Feb 10, 2012
The coal-rich hills of Australia's Hunter Valley have long fed China's steel furnaces but the winemaking region is riding a fresh boom as the Asian power's middle classes toast their new wealth.
Mining delegations are being replaced by wine enthusiasts as China's upwardly mobile millions get the taste for an expensive drop, and Australia's vintners are turning their efforts towards the lucrative new market.
"Every buyer that I have on my books right now is Chinese nationality, every one," said Cain Beckett, a real estate broker in the Hunter Valley.
"There are parallels with the heady days when everyone was just buying everything and spending cash hand over fist -- that hasn't happened for 10 or 15 years so it's interesting times."
Beckett sold eight vineyards to Chinese investors in the latter months of 2011, some of which had been on the market since the global financial crisis and went for Aus$120,000 (US$129,000) above asking price as buyers haggled.
The wine is destined for hotels, restaurants and bottle shops across China.
Times have been tough in the renowned winemaking district about 150 kilometres (93 miles) north of Sydney and Beckett said selling "eight of those at a time is pretty shocking, it's blown us away".
"We would have averaged less than one a month over the last year so it's a pretty big trend," he told AFP.
China is Australia's fourth-largest wine market and the value of exports to the Asian giant has exploded in recent years, from a little over Aus$100 million in 2008 to more than Aus$250 million in 2011.
Australia is second only to France in terms of wine exports to China by both volume and value.
Lucy Anderson, Asia director for the government-backed industry group Wine Australia, said overall consumption was increasing but growth was especially notable at "higher price points" as tastes matured.
"I think the Chinese wine market is incredibly complex, however, I would describe it as rapidly developing, not emerging," Anderson said.
Major winemaker Tyrell's said China had gone from accounting for two percent of its business five years ago to "around 35 percent and growing", mostly involving the wholesale of its wine under private Chinese labels.
Tyrell's was working closely with a Chinese company that had just purchased one of the Hunter vineyards and international manager Grant Bellve said the rush of foreign buyers had been a blessing for the local industry.
"If they didn't purchase where would those wineries be? Would the banks own them?" said Bellve.
He added that while the Chinese buyers can afford to buy the wineries, they still needed Australian production expertise.
"Most of (the Chinese buyers) have money that you and I would only dream about. If they do buy wineries then they need the expertise, (and) it allows you to get potential new distribution through unbelievable channels."
Bellve said it was too early to say whether Chinese ownership of Australian vineyards would be a permanent trend or how positive it would be for the industry in the long-term.
"I think they like to have somewhere that they can bring their customers to rather than saying 'this is a winery that produces for us'. They can put their flag up," he said.
"The biggest thing... is to get them to understand that wine is not a commodity, it's an agriculture. They think it's like a production line, and that's the key thing I think in getting them to understand the business."
Neil McGuigan, from premier label McGuigan's, said the purchases to date of a few small wineries in the Hunter were for hobby or status purposes and "not a game-changer for the Australian wine industry".
But he said some in the industry believed vineyard purchases were part of a larger long-term plan and warned against "export(ing) our knowledge and all our 200 years of making wine without something coming back our way".
"It's about getting land in Australia, it's about getting water. I think the Chinese are looking more than 10 years out," he said.
"They may be saying to themselves 'wine for the next 10 years and then at least we're in Australia, at least we're in a fantastic climate, we've got water, we've got land -- who knows where it could go from there?'."
Like Bellve, McGuigan saw consumer education -- getting "people from (drinking) Coca-Cola onto wine" -- and greater access to Chinese distribution networks as key.
"The French are here, the Americans are here, the New Zealanders are here, there are a lot of countries in here already so why not the Chinese?" he said of the Hunter Valley.
"As long as the wine that is made is good quality wine and the reputation of Australian wine is protected... what's the downside?"
Farming Today - Suppliers and Technology
Comment on this article via your Facebook, Yahoo, AOL, Hotmail login.
Miami battling invasion of giant African snails
Miami (AFP) Feb 10, 2012
No one knows how they got there. But an invasion of African giant snails has southern Florida in a panic over potential crop damage, disease and general yuckiness surrounding the slimy gastropods. The US and Florida departments of agriculture have mobilized 34 agents to battle the infestation and the US Fish & Wildlife Service is heading up an investigation into how the mollusks - which can ... read more