Italy to boost wine sales in China on Alibaba
Alibaba and Italy have outlined their intentions to boost the share of Italian wine sold on the Chinese e-commerce network 10-fold as a part of a wider move to increase Italian wine exports to China. Currently Italian wines sold in China lag behind their French and other winemaking counterparts, with only 87 million Euros out of Italy’s 5.4 billion Euro wine export industry going to China. In a joint conference with the Italian Prime Minister Matteo Ranzi, Alibaba’s founder Jack Ma said they intend to raise the share of Italian wines sold on the platform “from 6 to 60 percent.” According to Nomisma, the group which publishes the annual Wine Monitor Report, 85 percent of Italy’s 55,000 national producers make less than 10,000 bottles of wine per year. Italy’s Prime Minister emphasized that due to the nature of Italy’s wine industry, turning digital is the only way for small Italian companies to keep up as the competition goes global. Click here for the full article.
Good year for Chinese agribusiness adventures
In the past three months alone, Chinese purchases of Australian farms and agribusiness interests have already surpassed the agriculture boom of 2015. Deals including Shandong Delisi food company’s acquisition of 45 percent of Bundaree Beef for $170 million and Moon Lake Investments’ bid for dairy farming business Van Diemens Land Company in Tasmania for $280 million have contributed to this early success. Other important deals of 2016 include the purchase of Hong Kong’s CK Life Sciences grain farms owned by Western Australia’s John Nicoletti for close to $45 million and the anticipated sale of the Kidman cattle empire to Shanghai Pengxin for $350 million. Click here for the full article.
Brand trust trumps pricing for Chinese baby food
Global lead in yogurt making, Danone has enjoyed steady share increases aided by increased Chinese demand for baby food. This comes in the wake of changes to Chinese tax policies, hiking up the prices for online transactions on formula. However, the company has not indicated significant concern as the scandal-ridden formula market places high value on brand trust, something which Danone has achieved. In the first quarter of 2016 the company has experienced a 3.5 percent increase in like-for-like sales, noting that infant food sales in China were safely on the rise since implementing a more sustainable growth model. This is good news for the company as China has recently closed a tax loophole on online purchases, effectively adding 11.9 percent tax on imported goods bought online. This crackdown comes as part of broader measures taken by the Chinese government to improve food safety and fair competition in the food and beverage sector. For those competing, it’s brand trust and reliability that will continue to push growth. Click here for the full article.
China-backed AUD$370m ranch deal to be decided in July
Kidman and Co. has received a revised bid of AUD$370m from Chinese investors including real estate group Shanghai Pengxin. Despite an initial rejection by Treasurer Scott Morisson in November, the revised bid will be decided upon until mid July, well beyond the date of the upcoming general elections. Aside from Chinese investors in the bidding consortium, Australian investment group ‘Australian Rural Capital’ is set to purchase a 20 percent stake in S. Kidman and Co. The company’s executive chairman James Jackson noted this as an opportunity for Australians to invest in the Kidman business. Others are more hesitant, with Australian businessman Dick Smith warning of selling agricultural land to foreign investors and Agricultural Minister Barnaby Joyce favoring national ownership. However, with Agriculture representing one of Australia’s premium exports, the increase in large foreign investment is unsurprising. As the deal waits for the 90 day delay to pass, more analysis and comment will be sure to surface on the pros and cons of a bid this significant. Meanwhile, the sale will be reviewed by the Foreign Investment Review Board (FIRB) and an independent external reviewer commissioned by Federal Treasurer Scott Morrison. Click here for the full article.