Foreign investment buoys Margaret River winemakers

More than a dozen WA winemakers have joined forces to tackle the growing Chinese market.

Some of Margaret River’s biggest winemakers have decided that collaboration with their regional competitors is the key to cracking the fast growing but elusive Chinese market.

Watershed Premium Wines is at the centre of a deal to bring 15 regional producers together to sell their brands under a retail banner called Margaret River Wines, which has leased a retail space next to the Chinese visa application centre in Perth’s CBD and plans to roll out 10 stores in China during the next two years.

Another big Margaret River producer, 3 Oceans Wine Company, has taken a different tack, claiming considerable success with a revamped Chinese strategy, which it is encouraging other wineries to adopt.

3Oceans is controlled by Chinese interests, which took over after the original business, Palandri Wines, failed.

Watershed managing director Geoff Barrett confirmed the development, which has come at the same time as his business has taken over back office administrative functions and Western Australian distribution for McHenry Hohnen Vintners, whose co-founder, Murray McHenry, has joined the Watershed board.

Mr Barrett said a Perth resident, Michael Ma, would relocate to China where Margaret River Wines intends to open its first store in Beijing.

Watershed Premium Wines (China Operations) Pty Ltd, a business part owned by Singapore-born CK Chong, holds the Margaret River Wines business name.

“We are also doing some extensive development with them; new own brands for them for a Chinese grocery chain,” Mr Barrett said.

3Oceans has taken a different approach to developing business in China, after cutting back staff to a bare minimum in order to reassess its strategy, most notably by changing the product lines and price points, according to manager Ke Zheng.

Mr Zheng said he had recently returned from a major wine fair in Fuzhou, China, where 3Oceans wines had been well received.

“We are trying to have good quality wine but flexible on the price to meet Chinese demand,” Mr Zheng said.

“We have done the first step and we have done pretty well.

Mr Zheng said that Chinese consumers had become far more knowledgeable about wine and had access to more information than ever about prices.

He said 3Oceans was now seeking other winemakers that wanted to use its knowledge of the Chinese market to export their product.

“Now we can source wine for our clients not only from our own vineyards,” Mr Zheng said.

“The big difference is we have so many Chinese contacts, that is an advantage.

“We are happy to help other brands to expand in China through our contacts.”