The funds will be pumped into expanding production, processing and storage infrastructure at the facility.
Treasury - which owns Penfolds, Wolf Blass and Rosemount Estate among other brands - said in a statement to the Australian Stock Exchange that the infrastructure spend at Bilyara winery would increase its winemaking capacity, drive production efficiency and expand its storage capacity.
“The investment includes an additional production line, processing infrastructure and the construction of additional barrel storage facilities,” the report says.
Treasury says the investment is part of its continuing “premiumisation strategy”, which also includes buying production and vineyard assets in the Bordeaux region of France.
Wine Australia last month released its Export Report for the 12 months to June 2019, which showed Australian wine exports to China (including Hong Kong and Macau) had reached a financial year record, increasing 7% in value to $1.2 billion
The state of South Australia produces about half of Australia’s wine and 80% of its premium wine, much of which is produced in the Barossa Valley.