Maxville Lake Winery offers Cabernet Sauvignon, Cabernet Franc, Sauvignon Blanc and Petit Sirah.

Napa, Calif.—Foreign nationals, immigrants and international companies have long invested in Napa Valley and the U.S. wine businesses. While the Japanese economy boomed at home, several Japanese-owned companies invested in the North American wine trade in the 1980s, and the 21st century has seen buyers from China, Vietnam, South Korea and other Asian countries.

Recently, two high-end wineries with Chinese ties opened new tasting rooms in Napa Valley, prompting the question: Is Chinese ownership of North American wineries on the rise?

This spring, Acumen Wines, owned by Chinese-born businessman Eric Yuan, opened a high-end art gallery and tasting room in downtown Napa to display the wines from its vineyards next to Stagecoach Vineyard in Atlas Peak. Meanwhile, Maxville Lake Winery, owned by Qinghai Huzhu Barley Wine Co. of Haidong, China, opened a renovated tasting room at its winery in Chiles Valley, east of Napa Valley proper.

But dealmaker Robert Nicholson of International Wine Associates in Healdsburg, Calif., cautions against looking too deeply for a developing trend. Nicholson says more Chinese buyers are looking for lifestyle wineries than the larger wineries and vineyards he and competitor Zepponi & Co. generally handle.

Nicholson adds that political changes in China have reduced interest in overseas purchases, but added, “Chinese buyers gravitate to France,” which remains better known among Chinese interested in the wine industry. Nevertheless, “Napa has a big name for lifestyle,” he said.

Still, buying a winery, vineyard or similar property can have benefits beyond profits for foreign nationals looking for a path to citizenship. The U.S. EB-5 immigrant investor program offers a visa in return for creating or preserving jobs in the U.S. It requires applicants to invest at least $1 million in a commercial enterprise that creates at least 10 full-time jobs for U.S. workers. If the investment is in an enterprise in a Targeted Employment Area, a rural area or area with high unemployment, the required investment amount is reduced to $500,000.

Nicholson maintains that EB-5 deals aren’t too popular since wineries don’t have many employees. (For more on this practice, see “Washington State Vineyards Attract Immigrant Investment.”)

The business of wine

WINE INDUSTRY INVESTMENTS
 

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When it comes to Chinese-owned winery buyers, 7-foot-6-inch basketball star Yao Ming stands above the rest. But the list of Napa Valley winery buyers from Asia is long

1997: Stanley Cheng, a Chinese-American originally from Hong Kong, bought what became Hestan Vineyards in Gordon Valley. Cheng is CEO of Meyer Corp., the largest cookware distributor in the United States. Hestan has a tasting room in Yountville, Calif.

2005: Lee Hi-sang, CEO of South Korean conglomerate DongA One Group, bought the old Livingston-Moffet Winery from John and Diane Livingston and heavily renovated the property as Dana Estates.

2008: Taiwan-born Joe Chuang bought what became 12-acre Firefly Vineyards near Mount George. He is also owner of energy company Eco Global Solutions and a large wine project in China.

2009: National Basketball Association all-star Yao Ming launched a Napa wine label in 2009, and now sells Yao Family Wines from a tasting room in St. Helena. This is a different type of deal, initially involving no assets, just a brand.

2010: Originally from Zhengzhou, China, Veronica Wang bought the Koves Newlan Winery and turned it into Silenus Winery, a co-op that exports much of its output to China.

2011: Chinese Zhang Winery purchased Frazier Winery from Bill Frazier in 2011. Zhang sold it to sold it to the Martin family in 2014, and it is now Italics Winegrowers.

2011: Stuart Sloan sold his 40-acre Sloan Estate in Rutherford to Goldin Financial Holdings, a Hong Kong-based conglomerate, for $50 million ($40 million for the real estate).

2013: CCF Wines, a group of Hong Kong-based businessmen, bought Cleavage Creek Winery in Pope Valley. It is now called Calla Lily Vineyards.

2014: Carl Doumani sold his Quixote Winery in Stags Leap District to Le Melange, a Chinese-owned firm, for close to $29 million, according to Doumani. Le Melange is owned by a Chinese company called Gold Tower Group. Another subsidiary of Gold Tower Group, Jinta Vineyards and Winery, purchased Hannah Nicole Vineyards and Winery in Contra Costa County, Calif., in early 2013.

2014: 4088 Winery in Atlas Peak, the former Bialla Bialla Vineyards, was bought by an unidentified Hong Kong buyer for $3.2 million in cash.

2014: Kieu Hoang, a Vietnamese-American who sells primarily to Asian markets, bought Michael Mondavi’s winery facility to house his eponymous winery.

Merger and acquisition advisor Mario Zepponi agrees that today’s Chinese buyers are looking more for lifestyle deals than the big institutional buyers he generally sees. He noted that some past buyers wanted to take successful wineries and destroy what they had accomplished by transferring sales to China. “That doesn’t add up,” Zepponi said.

In fact, some buyers like Acumen and Maxville have refocused efforts from China to the U.S. and other markets.

Maxville Lake Vineyards once expected to sell most of its product in China, but now is partnering with Terlato Wines for U.S. sales. The company recently held a grand opening of its high-altitude winery in the eastern part of the Napa Valley AVA. 

A large delegation of Chinese distributors attended the event, where CEO Anthony Hsu and chairman Yinhui Li addressed the crowd in both English and Chinese.

Acumen Wine is owned by Chinese-born businessman Eric Yuan, who studied and lived in France before buying 40 acres of property from Jan Krupp in 2012. The company has applied to build Mountain Peak Winery on the property in remote Foss Valley, at the end of Soda Canyon Road.

One broker who specializes in winery estates for lifestyle buyers has talked to many Chinese prospects over the years—and sold a few wineries—but doesn’t see much activity these days. Robyn Bentley of Wine Country Consultants finds more domestic prospects, especially in the Pacific Northwest, though he handled both parties when Jan Krupp, who recently sold Stagecoach Vineyards, bought Kitchak Cellars in Napa.