Treasury Wine Estates Expands Luxury Portfolio with Strategic Acquisition of 75% Stake in Stone & Moon Winery in China

About Treasury Wine Estates Limited

Treasury Wine Estates Limited (ASX: TWE) is a leading global wine manufacturer, headquartered in Melbourne, Australia. With operations spanning over 11,300 hectares of vineyards, markets and produces more than 70 wine brands across three main divisions. The company sells its wines in over 70 countries, employing approximately 2,600 people across regions including Australia, New Zealand, Asia, America, UK, Europe, Middle East, and Africa. Originally part of Foster’s Group, TWE is now a standalone entity, renowned for its premium wine offerings and commitment to innovation in the global wine industry.

Treasury Wine Estates Expands Luxury Portfolio

Treasury Wine Estates Limited has made a strategic move to strengthen its presence in the rapidly growing Chinese wine market with the acquisition of a 75% stake in Ningxia Stone & Moon Winery Co. Ltd. Located in the renowned Ningxia wine-producing region of north-western China, the Stone & Moon Winery represents a significant addition to TWE’s growing portfolio of luxury assets. This acquisition, valued at approximately A$27.5 million (RMB 130 million), provides TWE with access to 43 hectares of premium vineyards, a state-of-the-art winery with future expansion potential, and a cellar door for consumer engagement. This expansion into China aligns with the company’s broader strategy of bolstering its luxury wine offerings and tapping into the growing demand for premium wines in the region.

The Ningxia region, recognised for its favourable climate and soil conditions, has become one of China’s most important wine-producing areas. TWE’s decision to invest in this region reflects the company’s belief in the long-term potential of Chinese wines. The acquisition not only enables TWE to enhance its Penfolds range with locally produced wines, but also strengthens its position as a leader in the luxury wine sector. As part of the agreement, TWE has the option to acquire the remaining 25% of the winery after five years, signalling the company’s commitment to expanding its control over its production and securing a strong future for its luxury portfolio.

Growth Pipeline and Expansion Strategy

The acquisition of Stone & Moon Winery is a key element of Treasury Wine Estates’ broader growth strategy, which focuses on expanding its luxury wine portfolio and increasing production capabilities to meet rising global demand. By securing a stake in one of the premier wine regions in China, TWE strengthens its ability to produce and market high-quality wines under its flagship Penfolds brand. The 43-hectare vineyard offers a steady supply of premium grapes that will feed into the production of Penfolds wines sourced from China, ensuring the company maintains its high standards for quality. This move reflects TWE’s broader strategy of investing in luxury vineyards and production assets to support growth in key international markets, particularly China, where luxury wine consumption is increasing at a rapid pace.

Additionally, the acquisition provides Treasury Wine Estates with a modern winery facility that can accommodate future expansion. The investment in local production capacity is aimed at improving the efficiency and scalability of operations, allowing TWE to meet the growing demand for luxury wines in China and other international markets. This move further supports TWE’s strategy of integrating vertically by enhancing control over production processes and ensuring the scalability of its business model. With this acquisition, TWE will be well-positioned to take advantage of future growth opportunities in the Chinese market while continuing to deliver premium wines that cater to the evolving preferences of affluent consumers.

Industry Context: The Growing Demand for Luxury Wines in China

China has emerged as one of the world’s largest and most dynamic markets for wine, particularly in the premium and luxury sectors. Over the past decade, the country’s increasing wealth, changing consumer preferences, and growing middle class have driven the demand for high-quality wines, particularly those from internationally renowned brands. Penfolds, Treasury Wine Estates’ flagship brand, has benefited significantly from this trend, with the wine brand gaining a strong following among affluent Chinese consumers. TWE’s acquisition of Stone & Moon Winery is a direct response to this growing demand for luxury wines, particularly as Chinese consumers continue to favour imported premium products over domestic alternatives.

The Ningxia region, where Stone & Moon is located, is known for its ideal conditions for grape growing, which has made it a focal point for high-quality wine production in China. As the region gains recognition for its wines, TWE is well-positioned to leverage the expertise and resources of Stone & Moon Winery to enhance its Penfolds portfolio and meet the growing demand for locally produced wines. The Chinese wine market is also becoming more sophisticated, with younger consumers increasingly interested in wine culture and willing to invest in higher-end products. By acquiring a stake in a winery in this region, TWE can capitalise on the shifting consumer trends and position itself as a premium wine producer that offers authentic, high-quality products that resonate with Chinese buyers.