Chinese investment in WC wines


Are Chinese investors fast cultivating a strong taste for the Western Cape wine lands?

In December Chinese technology entrepreneur William Wu uncorked a deal that saw him taking a controlling 51% stake in the iconic Swartland Winery in Malmesbury. Wine industry experts believe further investments by Chinese entities in established farms are almost certainly on the cards. There is a contention that SA wine farms offer great value compared with similar operations in France, Australia and New Zealand.

The Wu deal is no boutique wine farm purchase. The 67-year-old Swartland Winery crushes 25,000 tons of grapes annually, supplying a diverse selection of packaged and bulk wine to local and international clients. Wu – who has operated in SA since the early eighties – has clearly developed a taste for the local wine business, and has previously invested (on a smaller scale) in Paarl-based winery Veenwouden.

The value of Wu’s investment in Swartland Winery was not disclosed, but the businessman’s involvement seems to have strong support, with the majority of Swartland Winery’s 70 shareholder members voting in favour of the transaction. In a press statement Wu said his decision to invest in Swartland Winery was driven by the fact that he already had a market for the product.

“The market is in China where I have a ready demand for the quality and volume of wine Swartland produces. Swartland Winery is a great investment. It has access to good, well-farmed grapes and is one of the few South African wineries of this size where the majority of grapes planted are red varieties – in which the Chinese market is most interested.”

Wu added that Swartland Winery’s infrastructure – including bottling, warehousing and distribution – offered total control of supply and a one-stop shop for exporting to the Far East as well as continuing to service global and local markets.

“Due to recent developments, which has led to the wine world’s overwhelming interest in the Swartland region, the marketing opportunities for this winery in the developing Asian markets are limitless and we will most definitely tap into the excitement surrounding this region, which some international wine critics are calling the most exciting wine region in the world.”

Wu will serve as chairman of Swartland Winery, and be directly involved in the operations.

Outgoing chairman Frans Maritz reckoned the deal heralded a new chapter in the history of the Swartlandwine region.

“The investment will allow Swartland to unlock value for our member-farmers with new markets in China, which comes at a time when the Swartland brand is also making inroads in the European and African market.”

He believed the new Chinese partner and his associates in China would rejuvenate the Swartland brand and gear the wine business for exciting new markets and a different business ethos.

By Jenni McCann