Treasury Wine buys controlling stake in Chinese winery Ningxia Stone & Moon Winery Co

Australia’s iconic Penfolds wine will have a new Chinese home after Treasury Wine bought a controlling stake in a 43-hectare luxury winemaker in China.

Treasury Wine Estates CEO Tim Ford. Picture: Aaron Francis/The Australian

Treasury Wine Estates has bought a controlling stake in Chinese winery Ningxia Stone & Moon Winery Co as part of an evolving strategy to source luxury wine from the region with the winemaker also revealing Ningxia – known for its quality wine and vineyards – will be the future ‘Chinese home’ for its flagship luxury brand Penfolds.

Last year Treasury Wine, which owns Penfolds as well as a growing portfolio of Californian premium and luxury wines, took a key step in its China wine making strategy, launching a $150-a-bottle red wine from Chinese grapes as part of its 2023 Penfolds Collection.

The Penfolds’ China Winemaking Trial 521 was launched in China in 2023 made of grapes from Yunnan Province in China’s southwest, and Ningxia in north-central China.

Now Treasury Wine has further broadened its China strategy to announce on Tuesday the purchase of a 75 per cent stake in Stone& Moon which grows luxury wines on 43 hectares of vineyards in the prized winegrowing region of Ningxia.

Treasury Wine announced it had paid RMB 130m ($A27.5m) for a 75 per cent stake in Stone & Moon. Stone & Moon’s asset base includes 43 hectares of planted Luxury vineyards, a modern winery with capacity for future expansion and a cellar door.

Penfolds managing director, Tom King, (L) and Stone & Moon Founder, XuanHao Kang.

The acquisition of Stone & Moon is consistent with Treasury Wine’s strategy of investing in luxury vineyard and production assets to support the growth of its luxury-wine portfolio, the company said, and will complement its existing third-party sourcing arrangements to deliver an efficient and scalable production model for the Penfolds’ China country of origin portfolio. Additionally, Treasury Wine intends to evolve the site in the future to create a local brand home for Penfolds, building on its strength as one of the leading luxury wine brands in China.

The acquisition is expected to complete in the second half of 2025, subject to the satisfaction of customary closing conditions. The transaction terms include an option for Treasury Wine to acquire the remaining 25 per cent ownership after five years.

“Today’s announcement is a significant step forward for Treasury Wine, and Penfolds, in China. Through this acquisition, we will further strengthen our commitment to, and investment in, the China wine industry, where Penfolds continues to be a highly admired and sought after brand,” said Treasury Wine chief executive Tim Ford.

“The successful evolution of Penfolds to becoming a multi-country of origin brand has been a significant execution highlight in recent years, with the China sourced portfolio having resonated particularly strongly with Chinese consumers, and we look forward to continuing that momentum through this important long-term investment.

“We see a bright future for China as a premium and luxury wine making region,” Mr Ford said in 2023 when he launched the ‘Penfolds made in China’ wines.

Stone & Moon winery, which is located at the eastern foot of Helan Mountain in northwest China's Ningxia Hui Region.

Treasury Wine under Mr Ford has launched a number of global initiatives for its Penfolds brand, which generates the bulk of profits for the group, to sell a Penfolds wine made from California, and a Cabernet Sauvignon Merlot and Champagne from France.

Although wine consumption in China has fallen recently due to a slowing economy, an ageing and shrinking population and many younger drinkers turning away from wine, the country is still seen as having the potential to become one of the world’s largest markets with the growth of its middle class.

Originally published as Treasury Wine buys controlling stake in Chinese winery Ningxia Stone & Moon Winery Co