Dixon Yuan, founder of YesMyWine (Photo source: WINE)

According to an announcement on its website, AVL has signed an agreement with Vintage China Fund, a new partnership founded by YesMyWine founder Dixon Yuan, which will provide for the replacement of 15% of AVL’s existing capital (36 million shares) to Vintage China Fund at a share price of 46.01 cents.

The deal will give YesMyWine exclusive distribution rights to AVL’s wine brands except McGuigan, which has an existing partnership with COFCO, China’s largest food processor, manufacturer and trader.

Yuan will also join AVL as one of its board members.

The deal came at a time when Chinese wine consumers’ appetite for Australian wines is growing to an all time high, led by the popular Penfolds and other Aussie brands.

China has already become Australia’s biggest wine export market by value, and Australian wines have taken up a 25% market share in mainland China, second only to France, thanks to a Free Trade Agreement signed between the two countries.

Neil McGuigan, CEO of AVL, attributed China’s remarkable online sales growth as a key reason behind the partnership.

“This investment is a very exciting development for AVL and a great endorsement of our company, people and the quality of our brands. We already have a strong presence in a number of key global wine markets including the UK, North America and China, but in order for us to become a large player in those markets, particularly China, we need to continue to increase our sales footprint and build other brands around our already strong McGuigan base created by COFCO.

“This long-term, strategic partnership will deliver positive distribution and help build sales outside our traditional markets, thus creating natural financial hedges for the business. This, coupled with the recently signed distribution agreement with Palm Bay in the USA, is continuing to evolve our company into a truly global branded wine business,” McGuigan continued.

YesMyWine, a B2C online platform for wines and spirits founded in 2008 by Yuan, has grown to be the biggest online wine retailer in China operating in both mainland China and Hong Kong.

Speaking of the deal, Yuan commented: “The company’s branded growth in the traditional global markets for Australian wine has also been very impressive. AVL’s performance in Asia is pleasing but we believe we will be able to provide platforms and channels that will help step change the business in what will arguably be the largest market for wine in the world.”

(https://www.thedrinksbusiness.com/2017/05/australian-vintage-gets-lucarative-deal-from-chinas-yesmywine/)