The Yantai municipal government in Shandong province plans to sell a 33 per cent stake in one of the country's leading winemakers to Italy's Illva Saronno Investments, as the mainland accelerates its privatisation drive.
The Yantai office of the State-owned Assets Supervision and Administration Commission (Sasac) would sell the stake in Changyu Group for 481.42 million yuan, Yantai Changyu Pioneer Wine, the winemaker's Shenzhen-listed unit, said in a statement yesterday.
Yantai Sasac would sell an additional 10 per cent to an unnamed foreign investor, Changyu Pioneer said. The sales will put control of the 113-year-old winemaker in private hands for the first time in decades, reducing the state's stake to 12 per cent from 55 per cent.
A Changyu Group official declined to discuss the details of the deals, saying only that the sale to Illva Saronno would provide Changyu with a partner that could help it expand its scope.
'It is something positive,' he said, but cautioned that approval from the central government was still pending.
Overseas winemakers are expanding their presence in China to take advantage of rising incomes and the growing appetite for wine.
French spirits giant Remy Cointreau has bought a 24.75 per cent stake in Dynasty Fine Wines Group. Dynasty last month forecast that the mainland wine market would grow 35 per cent a year over the next three years. Wine sales in China rose 25 per cent year on year to 61.1 billion yuan in 2003, according to the US Department of Agriculture.
Wine accounted for about 15 per cent of all beverage sales on the mainland in terms of value, a Reuters report said.