(Yicai Global) Aug. 22 -- Southeast Chinese liquor maker Luzhou Laojiao will start promoting the products of Treasury Wine Estates to expand the sales of Australia's largest wine company's high-end wines in the Chinese market.

Luzhou Laojiao will become TWE's exclusive agent regarding brands such as Saltram and Penfolds BIN138 in China and become the largest agent of Grange, with a quota of over 50 percent, the pair said in a joint statement yesterday. Grange sells for over CNY33,700 (USD4,920) at TWE's official e-commerce online shop on Tmall.

TWE hopes that it can see a surging sales growth in the Chinese market by taking advantages of Luzhou Laojiao's high-end marketing channels, Peter Dixon, the Melbourne-based wine maker's general manager for Asia, Middle East, Africa and Global Travel Retail, told Yicai Global.

Chinese customers have problems in recognizing wine brands because China imports various types of wines with varying qualities, industrial insiders said, adding that traditional dealers lack the capacity and strength of brand building. Therefore, TWE chose to team up with a liquor producer instead of dealers.

At USD205.2 million, TWE's growth in earnings before interest, tax and other items rose 37 percent in Asia, which was more than in Europe or Australia and New Zealand, the firm released in its annual financial report on Aug. 16.

Luzhou Laojiao has a well-developed liquor distribution network and sales channels, said Cai Xuefei, liquor analyst of Jiuqixing, adding that with strong capital strength, it is understandable that the distiller enters red wine industry to stimulate new business growth.

Editor: Emmi Laine