CK Life Sciences, the biotechnology arm of Hong Kong’s richest man Li Ka-shing’s CK Hutchison Holdings, has acquired the second largest vineyard in Australia’s Margaret River, expanding its vineyard holdings in Australia and New Zealand, making it one of the largest vineyard holders in Australasia.
The AU$10.8 million (US$7.3 million) purchase of Edinger Estate, a 182-ha winery in Margaret River, is the latest acquisition for the company following its years of investment that now includes 29 vineyards in Barossa Valley, Padthaway, Margaret River, Riverland and Riverina, South Australia, New South Wales, Victoria, Western Australia and New Zealand.
This means the company now has over 7,500 hectares of vineyards in Australia and New Zealand, making it among the largest vineyard owners in Australasia and top 10 in the world, it says.
Majority of the vineyards are leased to winegrowers and producers to minimize risks, and the company says its grape demand has been steady despite China’s crushing tariffs imposed on Australian wines.
“Protected by long leases with reputable wine companies as tenants, the vineyard business was not affected by challenges other operating units faced, generating stable and recurrent cashflow in rental income. Our tenants experienced steady demand for grapes despite ongoing trade restrictions with Mainland China, with a softening in the market for red grapes being offset by the strength of demand for white grapes,” the company says in its latest 2022 interim report.
However, the company cautions that Brexit and China’s hefty tariffs on Australian wines till 2026 may have “adverse effects” on the group as the UK and mainland China are the two main export markets for its wines.
“The exit of the UK from the EU and the tension between Mainland China and Australia may have adverse effects affecting exports of wine by our tenants and their ability to keep up rental payment,” it warns.
Prior to the tariffs, Australia was China’s biggest wine supplier, exporting about AU$1.2 billion worth of wines annually to the country. The punitive tariffs of up to 218% plunged the country’s exports to its most profitable market instantly to just AU$200 million.
Aside from vineyard holdings, Li Ka-shing’s CK Hutchison Holdings Limited also owns Hong Kong’s biggest wine retailer, Watson’s Wine.
