Weilong Grape Co is selling the majority of its Australian Weilong Wines vineyards after falling victim to China’s punitive tariffs on Australian wine.

Weilong is China’s third biggest wine producer. It announced in a statement to the Shanghai Stock Exchange that it would sell its vineyard holdings in Coomealla and Nyah in the Murray-Darling region to “greatly relieve the operating and financial pressure of the Australian subsidiary, reduce the company’s debt”.

The vineyards were purchased when China was Australia’s biggest and most profitable export market. However, in 2020 Australian winemakers were targeted by Beijing officials, who imposed import duties of more than 200% on them. China was previously Australia’s leading export market, with sales worth $1.2 billion in the year to September 2020. Following the decision, exports to mainland China plummeted by 97%.

Weilong began its foray into the Australian wine industry by purchasing bulk wine out of the Riverina, Murray-Darling and Riverland regions of Australia. This wine was used to supply a select range of Weilong’s own wine labels in the Chinese domestic market.

Weilong said the “high level of quality and consistency of this wine” led the company to purchase vineyards in the Murray-Darling and Swan Hill areas in 2016.

Weilong Wines also constructed a brand-new winery near Mildura. Kicking off in late 2017, the first stage of construction reached completion in 2019 in time for a small inaugural vintage.

The company will retain holdings in Australia and said that if relations between China and Australia improve, it had enough supplies to meet potential demand in the next two years.

Members of the third-generation Littore winemaking family are looking to purchase two Weilong vineyard holdings for around $14 million.

The Littore winemaking business was founded by Mario and Aurora Littore, who migrated to Australia from Italy in the 1950s. 

Duxton Vineyards acquired the Littore vineyards for about $20 million in 2016. The Littore Vineyards, comprising around 1070 hectares of vineyards, mostly in the Murray Darling wine region near Mildura, produced around 30,000 tonnes of fruit at the time of sale.

Wine Australia closes China office