High profile victim of China's wine tariff feud now has to be sold

The family-owned business near Berri has been placed in voluntary administration after claims it had fallen victim to China's tariff barriers on imports.

The 26-year-old business, established by the Franchitto family in the Riverland near Berri, had been for sale for almost a year after struggling with the loss of its valuable China market.

Australian Grape and Wine chief executive Lee McLean has warned the trade between the two countries will not immediately pick up where it left off.

"We want to really stress the fact this decision, even if it is made permanently will not just flick a switch and the sales will be back where they were," he said.

KPMG and Heard Phillips Lieberenz have been appointed receivers and managers with Elders Real Estate and Woodbridge Iles appointed to undertake a sale of the business and assets.

Elders executive general manager network, Tom Russo, said the sale is being undertaken during a pivotal time for the industry given the recent announcement that China has reversed its punitive tariffs on Australian wine.

"To put things into perspective, the Australian wine industry lost a $1.4 billion export market overnight and now has the opportunity to reinstate its position as a preferred supplier to consumers within that vast market," he said.

"Whilst it is well understood that the industry continues to undertake a structural adjustment in response to supply issues, astute investors will be closely considering whether now is the optimum time in the cycle to deploy capital and enjoy the inevitable upside."

Selena, which owns the Twisted Sticks organic range, has 121.5 hectares of certified organic grape plantings as part of almost 200ha of vineyards.

The company will continue to trade while finalising a deed of company arrangement with creditors and looking at further potential sale options.

It also exports mostly red wine to Europe and the US.

Salena Estate has regularly made it into Australia's top 20 wine makers over the past decade.

Located at Bookpurnong, between Loxton and Berri, the wine company was established in 1998 by wine identities Bob and Sylvia Franchitto and named after their daughter Salena.

A vertically integrated operation, it grows its own grapes, harvests and transports them to a modern winery located on site, and then completes the production process by bottling and packaging before shipping to markets across the globe.

The Riverland accounted for 63 per cent of South Australia's grape crush in 2022.

Salena Estate has a crushing capacity of around 15,000 tonnes and a total storage capacity of around 17 million litres.

Salena Estate has also opened an award-winning restaurant, Cucina 837.

It also has a bottling and packing line, which processes about 4500 bottles per hour and a distillery, which produces a variety of gin and vodka products under the Lock4 Distillery label.

Becoming certified organic is a three-year process to convert a vineyard from normal production to organic

Salena Estate is a vertically integrated enterprise with significant grape production capacity, a modern winery and a bottling facility.

Mr Russo said: "The Salena Estate Wine business is a vertically integrated enterprise of scale that has been established to a corporate standard.

"We will be conducting a flexible expression of interest process that will cater for offers to acquire all or part of the portfolio.

"It will be of interest to a range both local, institutional and offshore buyers," he said.

Russell Iles, managing director of specialist wine industry transaction firm, Woodbridge Iles said the sale represented an opportunity to acquire significant production capacity and market access which would be expensive and time consuming to replicate.

"Buyers will see value in being able to acquire a quality asset and supported by a renowned stable of brands that provide immediate market presence".

The expression of interest process will close on May 24.

For more information contact the agents Tom Russo on 0409 873837 and Russell Iles on 0427 964388.