Apr 01

wine-business-international: Chinese buyers see our vineyards as ripe pickings

Tag: Ländersigi.hiss @ 09:45
GABRIELLE JOHNSTON –  AGENTS are reporting a rush of inquiry for vineyards from Chinese-based buyers that could lead to tens of millions of dollars in investments.However they’re proving tough sales to get in the bottle.South Australian wine industry broker, Toby Langley, Gaetjens Langley, said in the past six to 12 months there had been a “substantial” increase in Chinese inquiry about vineyards, including the Hunter Valley because of its proximity to Sydney.

“Wine sales are going strongly in China – there’s more wealth in China and Australia is seen as a safe place to invest,” he said. Mr Langley said Chinese interest was up 30 to 50 per cent, but at this stage there had not been massive ownership changes.

“It is not something that happens overnight.

“I think we’ve got better inquiry levels, and that should translate into more transactions, but it remains to be seen.”

In the Hunter Valley, Cessnock based property agent, Cain Beckett, Jurds Real Estate, is fielding an average of two phone calls a day from potential Chinese investors looking to get a piece of the Australian winegrape industry, with the level of inquiry from China having increased in recent months.

“I’m dealing with a lot of calls. Some of them are the same (people), who are asking a lot of different questions,” said Mr Beckett, pictured.

He said the most common requirement of buyers was a large winemaking facility so they could produce their own wine for export.

Just last week Mr Beckett said he met with a group of Chinese investors from quite a big company who were in the Hunter district to investigate potential investments.

“They have a wine business in China – all they do is distribute through bottle shops,” he said.

“They need a face here so they can say they’ve got a face in the Hunter Valley, or a face in Australia.

“They can put a photo of their estate on their bottles rather than just being Australian made.”

Mr Beckett said while Chinese investors usually had access to sufficient funds, the follow-through from inquiry to sale was “difficult”, and was yet to result in any significant foreign investments.

“A lot of the time they fizzle out at various stages, but some go through.”

Landmark’s NSW real estate manager, Phil Rourke, said he had Chinese investors “ringing every second day” looking for wineries and vineyards, but “it never comes to anything”.

“They’re ringing because of the fact that we sold about two years ago all the surplus Fosters vineyards … and they would be still seeing old brochures.”

He said while Clyde’s property portfolio – all but one property of which has now been sold – had attracted limited interest from offshore, for general run-of-the-mill property, there was very little overseas inquiry.

Chief executive of Sydney-based rural property specialists, Meares and Associates, Chris Meares, said while he had seen “huge” inquiry from offshore investors, and China in particular, not a lot had been sold.

“The big thing the Chinese are looking for is to guarantee supply of product to shore up the supply chain,” he said.

“The interest is across the board – it’s meat, it’s fibre, it’s grain, it’s dairy,” he said.

Mr Meares said he believed it was a funding issue as much as anything and one attraction to invest in Australia was the lack of domestic competition.

“If we can’t provide that capital from within Australia it’s going to come from offshore,” Mr Meares said.

The Australian Government will start collecting data on foreign ownership of agricultural land and agribusinesses, following a successful motion in Federal Parliament this week by Member for Calare, John Cobb.

Mr Cobb, also Shadow Minister for Agriculture and Food Security, said the motion would give Parliament the information needed for sensible safeguards.

The motion requires the Government to collect the data through the Australian Bureau of Statistics and the Australian Bureau of Agricultural and Resource Economics and Sciences.

“The Productivity Commission will review the information and recommend safeguards for national food security, taking into account not only individual investments but the cumulative impact of foreign ownership,” Mr Cobb said.

He said foreign investment had been vital for the development of agriculture in Australia but the past three years had seen a tenfold increase.

“The current rules for foreign investment are outdated and do not address food security.”

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