AUS: Gemtree Vineyards aims to double output after Chinese investment
A troubled Australian winery hopes to double output over the next year after securing vital investment from a Chinese businessman.
However, Andrew Buttery, MD of Gemtree Vineyards warned that other struggling winemakers may not be suited to a similar rescue. Buttery told just-drinks he had given his South Australian winery just 12 more months of business before he secured the deal with Song Yuangang, a partner in a Sichuan property company.
In return for investment and an undisclosed share in Gemtree, Song will organise distribution of its brands throughout China, Buttery said. Gemtree has signed an initial sales contract worth AUS5m (US$5.2m) and hopes to increase the winery's annual output from 30,000 cases to 60,000 within the financial year.
But Buttery, who spent two years researching Song before agreeing to the investment in his family-run business, said not every Australian winemaker could follow a similar path.
“When you go into partnership, there's a whole load of challenges with that,” he said. “You lose a bit of control and you have to answer to other people apart from those within your own family. I wouldn't say it would be everyone's cup of tea.
“I don't think there will be a massive influx of Chinese partners in the wine industry overnight. There are language barriers and all sorts of other cultural barriers to deal with and some people aren't cut out to deal with those things.”
Buttery added: “You've just got to find the right partner. I think I was a little bit fortunate.”
Song is a partner in Sacredtree International Trade Co, which is part of the Sichuan Taifeng Group based in Chengdu in southwest China.
The partnership includes marketing and promotion in China of the Gemtree brand, which Buttery said has minimal footprint in the country. The company has been exporting to China for the past three years through different distributors. But the sales contract with Song is "without a doubt" the biggest in the company's history, Buttery said, equal to about six months of sales.
Buttery expects future shipments to increase in value.
“I see it as a once-in-a-lifetime opportunity,” he said.
The Gemtree wine label was launched in 1998. It owns 330 acres of vineyard and grows varieties including Shiraz, Sangiovese, Merlot and Cabernet Sauvignon.
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