Australian wine giant Treasury Wine Estates (TWE) announced today the acquisition of a 75% equity stake in Stone & Moon Winery Co. Ltd, located in China’s northwestern Ningxia province. The deal, valued at RMB 130 million (US$17.9 million), underscores TWE’s strategic push to expand local wine production in China.

The acquisition includes Stone & Moon’s 43 hectares of vineyards, a modern winery with potential for expansion, and a cellar door. Situated in Qingtongxia in the Ningxia Hui Autonomous Region, the winery produces several grape varietals, including Cabernet Sauvignon and Marselan. These grapes have already been used by TWE’s flagship brand, Penfolds, for its China-origin wines.

Penfolds MD Tom King and Stone & Moon Winery founder XuanHao Kang

TWE previously has confirmed about building a Chinese winery, as we have reported. After China imposed up to 218.2% tariffs on Australian wines during the pandemic, Penfolds has pivoted to strengthen its presence in China.

In 2022, it introduced its first Ningxia-sourced wine, One by Penfolds. At the time, Penfolds Managing Director Tom King said it was the “first step” to demonstrate Penfolds’ commitment to “play a meaningful role in development of China’s wine industry”. The next year, it launched the high-end CWT 521 in 2023, made with grapes from Ningxia and Yunnan.

According to the company, the acquisition further strengthens its commitment to the Chinese wine industry and is a significant milestone in TWE’s efforts to enhance its presence in China and drive further connection and engagement with local consumers. 

This is the latest acquisition from the group after purchasing Daou Vineyards in Paso Robles in California in 2023 for an upfront payment of US$900 million.

“This acquisition aligns with our vision to grow our luxury wine presence in key international markets while strengthening our commitment and investment in China’s wine industry,” said TWE CEO Tim Ford. “We are grateful for the support of the national and local governments, our partners, industry organizations, and the wine community.”

Stone & Moon Winery founder XuanHao Kang called the acquisition a new chapter for his winery. “This partnership represents an exciting new chapter for Stone & Moon Winery, enabling us to showcase the exceptional quality of Ningxia wines to a global audience. We look forward to collaborating with the TWE team to celebrate the unique character of the Ningxia Hui Autonomous Region and contribute to the future of Chinese winemaking,” he said.

The Stone & Moon Winery acquisition plays a crucial role in Penfolds’ multi-country sourcing strategy, which emphasizes a portfolio of globally sourced luxury wines from regions like Australia, the United States, France, and now China. It will also support Penfolds’ luxury CWT 521, which highlights the unique terroirs of Ningxia and Yunnan while adhering to the brand’s signature “House Style.”

Penfolds Managing Director Tom King expressed optimism about the partnership. “After releasing our first China-sourced luxury wine in 2023, we’re delighted to be investing in such an exciting wine region in China which is gaining global recognition for its quality wines.

“Partnering with the Stone & Moon Winery will expedite the development of our Chinese winemaking capability, drawing on the expertise of the local Stone & Moon team. We look forward to working together to build on the deep connections Penfolds has in China, and to become a global ambassador for Chinese luxury wine.”

This investment builds on existing partnerships TWE and Penfolds have in China, including a long-term, multifaceted strategic co-operation with CADA, China’s primary alcohol industry body, working together to build China’s fast-growing wine industry capability.

The transaction is expected to complete in the first half of 2025.