LOCAL MEDIA: S. KOREA'S LOTTE GROUP LOOKING TO BUY VINEYARDS IN EUROPE
By Susan Lewis
Source: Lotte Group
South Korea's retail giant Lotte Group is actively looking to buy vineyards overseas after major rival the Shinsegae Group acquired Shafer Vineyards in Napa Valley for USD250 million last month, according to the Korea Herald.
“We are also looking at options to acquire a winery in France or other European countries famous for winemaking,” Korea Herald quoted an official from Lotte Group as saying.
“We already have plans at a certain level to start making wines by ourselves,” added the official.
Shinsegae and Lotte are South Korea’s two biggest retail giants, both of them have seen substantial growth in wine sales in recent years and are gearing up to produce high-priced premium wines on their own by acquiring quality wineries overseas.
Shinsegae announced last month that it will acquire Shafer Vineyards through its real estate arm Shinsegae Property.
The deal includes 225 acres of vines spread over four ranches (two in Stags Leap District, one in Oak Knoll District and one in Carneros), producing brands such as Hillside Select, One Point Five, Relentless and TD-9.
“With the latest acquisition, we aim to further expand our wine business and ultimately to make our own premium wines,” a Shinsegae Property official told Korea Herald. “If successful, although it’s too early to tell, we would become the first local retailer to do so,” added the official.
Last year, Shinsegae L&B, the liquor and beverage arm of Shinsegae, saw wine sales surge 58.2 percent to WON230 billion (USD184.7m), while Lotte’s beverage unit Lotte Chilsung Beverage logged WON80.5b in wine sales, up 34.4 percent from a year before.
Both companies had been focusing on entry level wines so far, by importing bulk wine from overseas and bottle them locally before selling in their own outlets.
Apart from big department stores, Shinsegae also owns convenience stores chain E-mart while Lotte also owns the 7-Eleven brand in South Korea.
Looking forward, both retailers appear to take a two-track strategy. That is, targeting the high-end market by acquiring premium wineries overseas, while relying on cheaper imports to appeal to a soaring mass market demand.
Value of South Korea’s wine imports grew 70 percent from USD330m in 2020 to USD559.8m in 2021. The stellar growth of wine consumption in recent years prompted global wine research firm Wine Intelligence named South Korea the world’s second most attractive wine market after USA.
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