Australia's largest family-owned winery McWilliam's has established a joint venture with the world's largest wine producer E&J Gallo Winery of California.

In the deal, Gallo will become the worldwide distributor outside Australia and New Zealand of McWilliam's Hanwood Estate brand. Hanwood Chardonnay and Shiraz will be launched in the UK next February and the US next June through Gallo.

McWilliam's produces about 2.5m cases a year from operations in three south-eastern Australian states. As earlier reported by just-drinks, the initiative follows studies by investment bankers Grant Samuel and accountants PricewaterhouseCoopers and Ernst & Young into growth options for McWilliam's.

The company has been trying to boost exports because domestic sales account for about 82% of its business in a generally flat market. McWilliam's thus joins the increasing number of Australian wineries with formal US ties including BRL Hardy's joint venture with Constellation Brands, Southcorp with Robert Mondavi and Foster's with its Beringer Blass arm.

McWilliam's chief executive Kevin McLintock said the Gallo link was the second strand in a global expansion strategy following an earlier joint venture with its Barwang International company and Jim Beam brands. This had achieved 50% compounded growth since its formation in 1998. The Gallo link will coincide with McWilliam's 125th anniversary next year.