Australian wine: Ripe for the picking

“We’ve certainly seen increasing interest in the wine sector, as we did with Japan buying up holiday resorts in the 1980s and ‘90s. There are some very high net worth individuals in China. A lot of these people may have made their money in mining or other areas where the work wasn’t particularly glamorous, and now they just want to spend their money on something nice,” says McCulloch.

“But the properties they want in the Barossa are Chateau Tanunda, Yalumba, Seppeltsfield, or Chateau Yaldara, because they’re the big impressive buildings.” A Chinese soap opera called Jiang Ai (Cherish Your Love Forever) filmed some episodes in the Barossa in February 2012, the storyline for which was that a rich father was buying a winery for each of his four daughters. You can guess which wineries they filmed at; and in the same way, buyers visiting the country are not interested in corrugated tin sheds.

The Barossa's Chateau Tanunda

The Barossa’s Chateau Tanunda

IN CONTROL

“Their pace of learning is so rapid, everything’s changing in a matter of weeks,” comments McCulloch. “The difference with Chinese buyers is that they want to control all the production and divert it all to China, cutting off any other previous market. Consequently they’re struggling to find what they want.

We tend to respond that it’s not our preferred option. Our preferred option is down a joint venture route, like we have with Banfi in the US. The way we see it, the distribution partner should not be too involved with production,” he sums up.

“They’re aware that Australia is one of the places where good wine can be made and we’re ready to build. If they take ownership they can control the quality of the product and control the brand in the market at the other end.

“Barossa is a high quality region, and one that’s recognised in China, so if someone gets a brand away properly in that market, the value of our production will increase exponentially.”

CULTURAL CHASM

Not all buyers approach their chosen winery directly, and the real estate market in some regions has been reaping the benefits of this renewed investment in rural property. However, it’s not just a case of signing on the dotted line; communication between two cultures with such different ways of doing business can be a serious stumbling block.

“The experience we’ve had with Chinese buyers is that it can be a very awkward process,” says Jill Turton, director of Stocker Preston real estate agents in Cowaramup, Western Australia. “They generally come with an idea in mind that possibly isn’t so realistic. They want to find the perfect option and that’s not always here.

There are options here that buyers could use as a foundation to build on, but they usually want to make a return straight away. That’s their business plan; they want to get a foot in the door and they want to come into the region at the top level, but they also want to pay as little as they can.

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