Treasury Wine Estates takes significant step in China’s wine industry with new acquisition

Treasury Wine Estates (TWE), a leading global wine company, has announced the acquisition of a 75% equity stake in Ningxia Stone & Moon Winery Co. Ltd., located in the heart of China’s Ningxia Hui Autonomous Region. The deal, valued at RMB130 million (approximately A$27.5 million), marks a major milestone for TWE as it strengthens its commitment to the burgeoning Chinese wine market.

This acquisition aligns with TWE’s broader strategy to deepen its presence in China, a key market for luxury wine production. The Stone & Moon Winery, renowned for its high-quality wines, boasts a 43-hectare vineyard with planted varieties such as cabernet sauvignon and marselan. The winery’s assets include a state-of-the-art production facility capable of future expansion, complementing TWE’s existing winemaking operations in international regions like Australia, the United States, and France.

Tim Ford, CEO of Treasury Wine Estates, emphasized the importance of this acquisition in driving TWE’s vision for expanding its luxury wine portfolio. “This acquisition fits perfectly with our plans to grow in critical international markets while reaffirming our dedication to China’s growing wine industry,” Ford said. His words underline TWE’s long-term commitment to fostering connections with local consumers and expanding their footprint within the country.

Stone & Moon’s legacy in the Chinese wine industry

Stone & Moon Winery’s history and reputation in China have made it a strong acquisition target for TWE. As one of the country’s notable luxury wineries, Stone & Moon has produced wines that have already been incorporated into Penfolds’ Chinese wine offerings. TWE’s subsidiary, Penfolds, will play a pivotal role in integrating these new vineyards into their “multi-country of origin” strategy. This approach, which includes wines sourced from regions like Napa Valley and Bordeaux, will benefit from the unique characteristics of Ningxia grapes, an area gaining global recognition for producing premium wines.

XuanHao Kang, the founder of Stone & Moon, expressed excitement about the partnership with TWE, stating that the collaboration would provide a significant opportunity to introduce the exceptional quality of Ningxia wines to a broader international audience. With this strategic acquisition, TWE plans to enhance its offering and ensure Penfolds’ success in the Chinese luxury wine market, which has seen rapid growth.

Expanding Penfolds’ Chinese presence

This acquisition also plays an integral role in Penfolds’ long-term strategy for developing its Chinese winemaking capability. The luxury wine brand aims to further solidify its position in China, supported by the Stone & Moon team’s expertise. Tom King, Managing Director of Penfolds, stated, “We are thrilled to invest in Ningxia, a region gaining global recognition for its quality wines. The partnership with Stone & Moon will fast-track our growth in China and support Penfolds’ longstanding commitment to global luxury wine standards.”

Incorporating Stone & Moon into Penfolds’ portfolio will further advance the production of China-sourced luxury wines. One of the key projects will be the Penfolds Chinese Winemaking Trial (CWT) 521, which will blend Ningxia grapes with those sourced from Yunnan to create a wine that maintains Penfolds’ renowned House Style while showcasing the unique terroir of China.

The impact of this acquisition on TWE’s global strategy

Treasury Wine Estates’ acquisition of Stone & Moon Winery reflects a broader strategy to reinforce its luxury wine presence in key international markets. By tapping into the rapid growth of the Chinese wine industry, TWE aims to establish itself as a dominant force in the global wine market. With an extensive portfolio that includes renowned brands like Penfolds, 19 Crimes, and Matua, TWE is well-positioned to leverage its resources and expertise to accelerate the development of Chinese winemaking capabilities.

The transaction is expected to complete by mid-2025, solidifying TWE’s foothold in one of the most promising wine markets in the world. As China continues to emerge as a global leader in wine production, TWE’s strategic acquisition of Stone & Moon will likely serve as a blueprint for further expansion in the region.