McLaren Vale winery Gemtree is up for sale ending tie up with Chinese investor
A Chinese property developer and iron ore player along with local owners have placed a McLaren Vale winery on the market, and are expected to court offers in excess of $10m.
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McLaren Vale winery Gemtree Wines has been placed on the market by its owners, which include Chinese iron ore and property investor Yuangang Song.
Gemtree is a leading light in the biodynamic wine sector, and according to wine industry property broker Langley & Co is currently selling 40,000 cases per year with national wholesale distribution through Oatley Fine Wine Merchants.
The winery is expected to court offers in excess of $10m.
Gemtree, founded by the Buttery family in 1998, is now owned by Mike and Melissa Brown (the daughter of Paul Buttery who founded the business with wife Jill) and Mr Song’s company Sacredtree International, which owns a slight majority.
Mr Song signed a joint venture agreement with the McLaren Vale winery in 2013 to market and sell Gemtree wines in China under the Gemtree and Sacredtree brands, and also that year committed to investing $30m in the business over five years.
His company, Sichuan Taifeng, is involved in real estate, mining, manufacturing and other sectors, and invested $49 million in formerly ASX-listed iron ore miner IMX Resources in 2010 to fund the development of the Cairn Hill iron ore project, southeast of Coober Pedy in South Australia.
That project is now owned by unrelated Chinese entity Cu-River Mining.
Langley & Co has listed Gemtree for sale, saying “due to a change of circumstances with a shareholder the business is being offered for sale as a going concern’’.
The agency would not confirm which shareholder wanted to sell, however it is understood the Browns are open to staying with the business under a new owner and also have grape supply agreements with Gemtree from separately-owned vineyards.
Prices for Gemtree wines range as high as $260 for the Subterra Shiraz, while it also has varietals in the $15-$25 range.
Langley & Co says the company produces grenache, tempranillo, fiano, albarino and shiraz, with the winery itself consisting of a 3000 tonne winery, 1000 tonnes of contract winemaking and on the tourism side it has an eco-trail, wetlands, premium accommodation and a modern tasting room with panoramic views of McLaren Vale and the coastline.
Mr Song’s Sichuan Taifeng also invested in Western Australian miner Ferrowest, putting in $20 million in 2011 to develop an iron ore project.
Ferrowest changed its name to Living Cities Development Group in December 2015 and released a prospectus to raise money to buy 51 per cent of a farmers’ market project in China.
Living Cities’ application to be listed on the stock market was rejected by the ASX however, and the company was placed in administration in July, 2016.
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Originally published as McLaren Vale winery Gemtree is up for sale ending tie up with Chinese investor
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