China’s rich ‘want to build own wineries’

Almost half of Chinese tycoons are interested in building their own wineries as an attractive investment, according to a recent survey.

China’s promising local wine market has encouraged potential investors to consider putting their money in ventures closer to home, reported Shanghai-based Chinese Business News.

A recent survey has revealed that almost half of Chinese tycoons with assets of more than US$30m are interested in building their own wineries due to the increasing price tags of international vineyards.

The rush of Chinese investments overseas in the last few years has resulted in a 6.2% jump on average in North America and 2.3% in Europe and that once these markets mature, investors will target New Zealand and Australia, said the report.

However, Chen Qide, an investor from China’s Fujian Province has said that hurdles faced overseas will swing local vineyards in their favour.

He cited difficulties to do with vineyard and winery shortage, operational manpower, and different government regulations pertaining to foreign winery investments as the reasons why investors should look at the opportunities offered by China.

Eight years ago, Chen leased from the Yinchuan government 100,000 acres of land at 2,000 yuan (US$315) per acre, and started planting grapes that cost 20 million yuan (US$3 million), he said.

Chen has plans to establish 100 small wineries in hopes of profiting about 10 billion yuan ($1.57 billion).

Chinese investors continue to grow interest in investing in small wineries, which comprise the majority of such businesses in the country.

Aside from throwing money at the situation, the entrepreneurs still have little experience in managing vineyards and can learn only through foreign-owned enterprises or through partnerships with them, said the paper.