China's third biggest wine company is aiming to have an $80 million winery up and running by 2019 near Mildura to mirror the export strategy of big Australian rivals including Treasury Wine Estates, and says short-term red tape won't crimp its long-term plans.
Weilong Grape Wine Company, which operates the Grand Dragon wine brand, has a permit from the local council for the construction of the winery. It is just a few kilometres from the vast Karadoc winery in north-west Victoria operated by Treasury, which produces a number of brands including Lindemans. The Weilong winery is being described by experts as one of the largest infrastructure investments in the $4 billion wine industry in Australia in the past decade.
Weilong has been tangled up in some red tape, first because of objections from rivals such as nearby Zilzie Wines and lately through a complicated planning issue involving Telstra and future telecommunications infrastructure which delayed the transfer of a title for the land on which the winery will be located.
But Weilong's general manager of Australian operations, Bruno Zappia, said on Wednesday he was confident it would be resolved soon, and that the 80,000-tonne winery would be up and running in time for the 2019 vintage. The Weilong strategy was simple.
"They're feeding their own market," Mr Zappia said.
Australian wine exports to China jumped by 40 per cent in 2016 to $520 million, making mainland China the biggest export destination as it overtook traditional markets the United States and United Kingdom.
Planning process
The premium brands of Penfolds and Wolf Blass from the Treasury portfolio were at the forefront of the large jump in Australian exports under a deliberate strategy by Treasury chief executive Mike Clarke to position them as luxury brands. Weilong operates at the more commercial end of the wine market.
The Weilong facility would sit just below Treasury's Karadoc facility in size. The Karadoc plant has a grape-crushing capacity of 115,000 tonnes.
Weilong last year acquired three large vineyards in the Mildura and Swan Hill region for $13.4 million as part of its strategy to produce Australian wine for the Chinese market.
Mr Zappia said Grand Dragon would have multiple price points. The winery would steadily ramp up production. "There will be a combination of our own vineyards and external grapegrowers," he said.
There had been frustrations in the planning process and the bureaucracy, but it was now in the final stages. "It was pretty much a bunfight between Telstra and the council," he said.
Mildura Mayor Glenn Milne said on Wednesday it would be a major economic injection for the region. "We're trying to move heaven and earth to get it going," he said.
Murray Valley Winegrowers executive officer Mike Stone said it was a "very significant project" in the national context. He represents 350 grapegrowers in the region who combined produce 20 per cent of Australia's grape harvest. "Probably in terms of its size it is one of the biggest investments in infrastructure in the last 10 years," Mr Stone said.
