Some Chinese interest remains in Australian vineyards as a recent purchase in Western Australia’s Margaret River shows.
CK Life Sciences, the biotechnology arm of Hong Kong billionaire Li Ka-shing’s CK Hutchison Holdings, last month acquired a family-owned vineyard in Western Australia for A$10.8 million. The purchase of Edinger Estate, a 182-ha winery in Margaret River, is the latest acquisition for the company. It follows investments over many years that now include 29 vineyards in Barossa Valley, Padthaway, Margaret River, Riverland and Riverina, South Australia, New South Wales, Victoria, Western Australia and New Zealand.
The South China Morning Post reported that Tate Wines had a long term lease on the Edington Vineyard.
“Protected by long leases with reputable wine companies as tenants, the vineyard business was not affected by challenges other operating units faced, generating stable and recurrent cashflow in rental income. Our tenants experienced steady demand for grapes despite ongoing trade restrictions with Mainland China, with a softening in the market for red grapes being offset by the strength of demand for white grapes,” the purchaser says in its latest 2022 interim report.
As well as its vineyard holdings, Li Ka-shing’s CK Hutchison Holdings Limited also owns Hong Kong’s biggest wine retailer, Watson’s Wine.
However, the company cautioned that Brexit and China’s hefty tariffs on Australian wines till 2026 may have “adverse effects” on the group as the UK and mainland China are the two main export markets for its wines.
“The exit of the UK from the EU and the tension between Mainland China and Australia may have adverse effects affecting exports of wine by our tenants and their ability to keep up rental payment,” it warned.
