Australian Vintage, maker of the wine brand McGuigan, signed a distribution deal with China's largest food processor, manufacturer and trader, the state-owned COFCO, a development that will make its product available in one of the largest growing wine market.

The deal gives Australian Vintage a strong distribution partner in China, where wine is getting a bigger following among local drinkers. Agence France Press reported that China overtook France as the world's largest consumer of red wine with nearly 1.9 million bottles sold last year based on data by Vinexpo Asia-Pacific.

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Australian Vintage CEO Neil McGuigan was reported saying that China is one of the most exciting emerging markets for the global wine industry, and there is a clear opportunity for Australian wines there. Currently Australian Vintage’s China sales account for only 5 percent of its total sales. Its biggest selling brand in China is McGuigan Black Label.

McGuigan Wines brand will be the strategic partner for Australian wine throughout China for COFCO's newly established International Wine division. With the McGuigan Wines partnership, COFCO further bolsters its beverage selection as it also has tie-ups with wine makers based in Argentina, Chile, the US and France, according news site Farm Weekly.

The news site said the partnership with COFCO provides benefits aside from its wide reach. It said the alliance could also help McGuigan navigate the often opaque and difficult trading environment in China.

AFP, however, noted that the deal comes amid a slowdown in spending for luxury items due to the government’s austerity and anti-corruption drive, which have made government officials and rich elite more cautious in splurging on high-end items.

Despite this, Australian Vintage remains confident in the prospects of its brand in China with McGuigan saying he is hopeful the deal will help it achieve its targets. He added that the company was honoured to have COFCO as partner given its stature and credibility as a “forward-thinking wine distribution company that understands the need to take the Chinese consumer on the wine journey." 

TagsAustralian wine, COFCO