Department of State Development

Consumer demand in China drives investment in Australian winery

Chinese liquor producer, Lu Zhou Lao Jiao has invested in a leading Australian winery to cater to changing consumer tastes in China.

The company bought a multimillion dollar stake in Shottesbrooke Vineyards, which is located in McLaren Vale, one of the leading wine regions in the state of South Australia. This is Lu Zhou Lao Jiao’s first investment in Australia.

Lu Zhou Lao Jiao is China’s third largest producer of the popular alcoholic beverage ‘bai jiu’, which is made from sorghum and other grains. It distributes its products in China, with north, southwest and central China as its major markets.

The investment by the state-owned company is a move to tap into China’s growing wine market, leveraging Lu Zhou Lao Jiao’s established distribution network and customer base. The investment stake includes sole distribution rights in China, according to the Adelaide Advertiser.

Shottesbrooke Vineyards produces 100,000 cases of premium wines, primarily of reds, each year. Owner Hamish Maguire told the Advertiser that he expected at least half the volume to be taken up by Lu Zhou Lao Jiao.