Champagne maker Moët-Hennessy has invested in a vineyard in the mountains of China that will produce red wine for the domestic Chinese market.

Luxury brand LVMH has signed an agreement with a major alcohol, wine and spirits distributor in China, VATS, to develop 30 hectares of vineyards at an altitude of 2,400 m in the mountains of Yunnan, in southwestern China.

The luxury Champagne brand had previously acquired a Chinese spirits brand from the Sichuan area of China five years ago. Last year, Moët-Hennessy also began production of a premium sparkling wine in the province of Ningxia Hui.

Cabernet Sauvignon, Merlot and Cabernet Franc grapes will be planted first, followed by Petit Verdot and Malbec once the vineyard is more well-established, according to reports in Chinese media.

It is expected the first vintages will be ready for sale in three to four years and the companies are currently working on how to label and market their wines.

“The brand name and package are as important as the wine quality in marketing to both Chinese and international consumers,” managing director of Moet Hennessy Asia Pacific Mark Bedingham told the China Daily newspaper.

Moet Hennessy says it is moving directly into China to further exert its influence over a market the company claims last year provided the lion’s share of the 3.52 billion euros in revenue it collected from Asia, where the brand is associated with success and prestige. Homegrown wines in China are also hit with less duties than imports.

The explosive growth of middle and upper classes in Chinese society has been attracting major wine brands around the world.

Les Domaines Barons de Rothschild also developed 25 hectares of vineyards in the province of Shandong in 2008, with the goal of producing 240,000 bottles of premium wine which will be aged until 2014, reports Challenges.fr.