The Horse’s Mouth recently wrote about the growing Chinese taste for wine and wine drinking culture in China. We can now reveal that a Chinese company, Perfect China, has recently acquired the Val de Vie estate in the Cape Winelands for an undisclosed (but presumably hefty) amount. This is the first time a Chinese multinational has invested in South African vineyards but you can be sure that it won’t be the last.
South Africa’s largest wine export markets at the moment are the UK (which accounts for 22% of South African wine exports), Germany, Sweden and the Netherlands but the US and China are both becoming increasingly significant. Excelsior is slightly unusual in the South African market because we have a long relationship of exporting to the US through our friends at Cape Classics and we also have a presence in various European markets. We have recently started to export to China.
At the moment China buys around 3% of South Africa’s wine exports. It doesn’t sound much but if you bear in mind that there has been a steady 34% increase between 2009 – 2012 it looks set to be pretty significant in the future. Figures released by the Department of Agriculture in the Western Cape for January – May 2013 show a whopping 53% increase in total wine exports to China compared to the same period in 2012. Whichever way you look at it, China is means business.
Ryk Neethling, the former gold medal Olympic swimmer and now marketing director of Val de Vie, said that the estate in Paarl will be administered by Perfect Wines of South Africa. PWSA is a joint venture formed in 2011 between Leopard’s Leap Wines and Perfect China in Yangzhou. The partnership has taken nearly a decade to ferment but now PWSA export around 2.8 million bottles of wine to China a year, about a quarter of the total.
The acquisition of Val de Vie, which includes the historic manor house built in 1783, provides the L’Huguenot cape wine brand, targeted exclusively at the Chinese market, a permanent home. The wines will be heavily promoted in China and there are also plans to encourage more Chinese tourists to Cape Town. Val de Vie seems a good choice given it’s Huguenot heritage and focus on lifestyle. Perfect China are well placed to help the brand expand rapidly as it has more than a million agents via 5,000 depots in China as well as infrastructure elsewhere in Asia including Hong Kong, Singapore, Thailand and Taiwan.
The L’Huguenot brand is currently released as a Shiraz/Pinotage blend, Shiraz and Chenin Blanc. Annual production is expected to be over 1.5 million bottles from 2014.
Perfect Wines South Africa plans to bring 700 people from the Chinese sales and distribution teams to Cape Town on an incentive trip in early September. The idea is to introduce them to South Africa and enable them to become ambassadors for South African wines.
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