Sale of wine company Salena Estate pitched as an opportunity to cash in on China market

Administrators and receivers have begun a sale campaign for Riverland wine company Salena Estate, pitching it as a chance to capitalise on the removal of Chinese tariffs.

Salena Estate’s restaurant and cellar door in Bookpurnong.

Administrators and receivers have begun a sale campaign for Riverland wine company Salena Estate, pitching it to local and offshore buyers as an opportunity to capitalise on the removal of Chinese tariffs on Australian wine.

The real estate arm of ASX-listed agriculture company Elders and Adelaide-based vineyard and winery sales specialist Woodbridge Iles have been appointed to oversee the sale process for Salena Estate’s 15,000 tonne winery, 17 million litre storage facility, 185ha of vineyards and fully equipped laboratory and bottling line, which has a capacity for 4500 bottles an hour.

The sale also includes a commercial distillery that has produced gin and vodka products, and Salena Estate’s restaurant and cellar door in Bookpurnong, about 10km north of Loxton.

Salena Estate is one of the country’s largest organic wine producers, and a top 20 Australian wine company by total wine production.

However, the company struggled to find new customers to fill the void left by the collapse of the Chinese market in 2020, when authorities in Beijing imposed tariffs of up to 218 per cent on Australian wine.

With those imposts removed last month, it is hoped a buyer can be found to save the business, which owes creditors more than $20m in unpaid debts.

Elders executive general manager network Tom Russo said ­offers to acquire all or part of Salena Estate’s portfolio of assets would be considered.

Mr Russo said he expected to field interest from local, institutional and offshore buyer groups.

“The sale process is being undertaken during a pivotal time for the industry given the recent announcement that China has reversed its punitive tariffs on Australian wine,” he said.

“To put things into perspective, the Australian wine industry lost a $1.4bn export market overnight and now has the opportunity to reinstate its position as a preferred supplier to consumers within that vast market.

“Whilst it is well understood that the industry continues to undertake a structural adjustment in response to supply issues, astute investors will be closely considering whether now is the optimum time in the cycle to deploy capital and enjoy the inevitable upside”.

Administrators took control of most of the Salena group entities in February, including main trading company Salena Estate Wines, and related companies that run the vineyards and manage the group’s bulk wine ­exports.

Another related company, B&S Franchitto, owns the group’s two properties in Bookpurnong and Lyrup, and is currently in the hands of receivers Andrew Heard and Anthony Phillips from Heard Phillips Lieberenz.

Westpac is the main secured creditor of the Salena group, owed close to $20m, while unsecured creditors, including close to 20 local growers, have been left $4m out of pocket.

The Riverland and other inland wine regions, including the Riverina in NSW and the Murray Valley in Victoria, have borne the brunt of the Chinese tariffs, which created a glut of mainly red wine.

Minutes from the first creditors’ meeting in March revealed about five million litres of bulk wine was left unsold at the Salena Estate winery at the time administrators were called in.

Westpac is providing the funding needed for administrators to continue to trade the business through to the end of the sale campaign.

Expressions of interest close on May 24.

Originally published as Sale of wine company Salena Estate pitched as an opportunity to cash in on China market