Hong Kong-listed Grace Vineyard has taken another step away from its roots as one of China’s best-known boutique wineries, investing in a historic baijiu producer as its new controlling shareholder accelerates plans to build a broader alcohol business.
The company, best known as China’s first boutique winery listed on the Hong Kong Stock Exchange, has announced its first strategic investment in baijiu, acquiring a stake through a wholly owned subsidiary in Wang Defang Baijiu, a sauce-aroma baijiu brand based in Guizhou’s famed Maotai Town.
The investment marks a significant shift for a company that spent nearly three decades building its reputation around premium Chinese wine. It also reflects Grace Vineyard’s broader transformation into a diversified alcohol platform following its acquisition by Yang Lingjiang, founder of alcohol retailer 1919 Group.
Earlier in March, as we have reported, Grace Vineyard’s controlling shareholder Yang Linjiang, founder of 1919.com had signed a strategic agreement with Renhuai city in Guizhou province, the powerhouse region behind sauce-aroma baijiu. The deal spans product development, branding and supply chain collaboration, marking Grace Vineyard’s most concrete step yet into China’s dominant spirits category.
The purchase is seen as a move forward into its Baijiu expansion.
Financial terms of the investment, including the size of the stake acquired, were not disclosed.
Founded in 1997, Grace Vineyard pioneered China’s boutique winery model and released its first wines in 2001. It became the country’s first fine wine producer to list in Hong Kong in 2018, with flagship labels such as Chairman’s Reserve and Deep Blue helping establish its position in China’s premium domestic wine market.
That strategy began to change in December 2025, when Yang acquired a 73.63% controlling stake in the company for approximately HK$156 million (US$19.9 million).
Although the acquisition was made in his personal capacity, Grace Vineyard quickly underwent a strategic overhaul.
In February, the company reshuffled senior management, appointing a new chairman and bringing in several executives with backgrounds at 1919 Group.
Three months later, it established six wholly owned subsidiaries in Chengdu, covering businesses including brand management, manufacturing, supply-chain operations, e-commerce, retail channels and digital marketing.
In its latest annual report, Grace Vineyard said it plans to expand beyond wine into baijiu, beer, imported spirits and low-alcohol beverages as part of a broader strategy to build an integrated alcohol business.
The investment in Wang Defang represents the company’s first major step toward that goal.
The brand traces its origins to the late Qing Dynasty(1636-1912) and is regarded as one of the founding brands of Ronghe Distillery, one of the three historic distilleries that helped establish Maotai Town as the centre of China’s sauce-aroma baijiu industry.
Sauce-aroma baijiu, led by Kweichow Moutai, has been one of China’s fastest-growing premium spirits categories over the past decade, attracting heavy investment as producers expanded capacity to meet surging demand.
More recently, however, the market has entered a period of adjustment. Slower business spending, rising distributor inventories and increased competition have put pressure on many second- and third-tier producers.
The move has prompted questions about whether Grace Vineyard’s diversification fits the company’s long-established brand identity.
Wang Dehui, general manager of Shenzhen Zhide Marketing Planning Co., said the investment may make sense from a capital allocation perspective but risks weakening Grace Vineyard’s position as a premium wine producer.
“Grace Vineyard has always been recognised as a professional boutique winery,” Wang said. “Consumers associate the brand with wine. It’s difficult for them to imagine Grace producing baijiu.”
He said the company could also face challenges selling baijiu under a brand that consumers already strongly associate with wine.
“Leveraging Grace Vineyard’s existing brand equity to market baijiu will be difficult,” he said.
Wang also questioned the timing of the investment, arguing that China’s sauce-aroma baijiu segment has moved from rapid expansion into a more competitive phase marked by slower demand and widespread price pressure.
“If DBR Lafite suddenly started producing a completely different type of alcohol, it would inevitably damage the brand,” he said. “The only way I can understand this decision is from a capital markets perspective.”
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