Australia's oldest commercial walnut orchard on Tasmania's east coast has been snapped up by Western Australia's largest wine producer. 

Stahmann Webster, an Australian tree nut grower owned by Canadian investment firm PSP, has offloaded its Swansea property to family-owned Fogarty Wine Group.

The sale of the 1,048 hectare property, including 22ha of grapevines, was finalised last month.

The Perth-based business already has major wine and grape production interests in southern Tasmania. 

"Our soil tests and analysis indicates we can plant up to 500ha of vineyard," executive chairman and founder Peter Fogarty said.

"We don't want to muck up the Tassie market."

Stahmann Webster made the decision to sell its Tasmanian property following a review of its national portfolio.

The company is owned by Canadian pension fund PSP Investments and is the largest foreign investor in Australian agriculture.

"With our walnut operations increasingly concentrated in the Riverina region, there were fewer operational synergies available from our Tasmanian orchards," a spokesperson said.

"In line with our approach of using land for its highest and best use, we believed the Swansea orchard would prove attractive to potential investors.

"Particularly given its suitability for vineyards in a highly sought-after winegrowing region."

About 290ha of the property is dedicated to growing walnuts, and the most productive trees will remain on the farm for the next five years.

The walnuts will be sold back to Stahmann Webster over that time.

After that, the trees will be pushed out and replaced with grapevines.

Walnut pioneers

The walnut orchard was planted in 1998 by iconic Tasmanian agricultural company Webster.

It pioneered the commercialisation of the industry in Australia and went on to become the country's largest walnut grower.

Webster planted four main varieties and experimented with a range of others.

Tasmanian-grown walnuts are known to have a sweeter, creamier flavour because they take longer to mature than warmer states.

The walnuts are shipped to the New South Wales Riverina, and virtually within 24 hours are cracked at the Leeton processing plant.

Staff who manage the walnuts and the existing vineyard will be kept on.

Thirst for cool climate grapes

Tasmania's east coast has become a magnet for interstate winemakers, chasing a cooler climate to grow fruit.

It is in stark contrast to other major wine regions in Australia, grappling with a grape and wine glut.

Grapes in Tasmania can command an average price of up to $4,000 a tonne.

That's compared to the 2023 national average of $642 a tonne.

Mr Fogarty said cool climate grapes grown in Tasmania were in a league of their own.

"Tassie is a tiny producer, as is Margaret River," he said.

He was adamant the plantings underway on the site would not flood the local market with fruit.

"We saw in Western Australia, the wine industry messed up to to a certain extent, by guys doing these sorts of things for tax-driven reasons," he said.

"We bought one of those vineyards very cheaply. We don't want that to happen in Tassie."