Penglai is located at the very northern part of the Shandong Peninsular stretching across 37°25´--37°50´N, the same latitude as Bordeaux France and Napa Valley in California. Its advantageous location, moderate climate, suitable soil index and effective annual accumulated temperature make Penglai one of the four Chinese high-quality wine-making grape production bases.

With long grape-planting and wine-making history Penglai owns a large number of experienced grape farmers and skillful brew masters. The municipal government gives much emphasis on the wine-making industry, which is one of the four pillar industries in the city. There are 4000 hectares of vineyards and the number will reach 6,700 hectares in 2005 and 13,333 hectares in 2010. There are about 40 winery companies in Penglai. The annual production capacity for high quality wine is more than 45,000 tons.

As a famous coastal tourist city, Penglai boasts of its developed agriculture and industry, convenient transportation, perfect infrastructure and vigorous business environment. Flexible and pragmatic measures have been taken in the undertaking of investment policies, industrial park construction, technology protection, information service and administrative inspection and approval, which attract many large companies in the field such as Changyu Group Co., Ltd. Yantai, Sino-French Joint-venture Dynasty Winery Ltd., Yantai COFCO Winery Co.,Ltd., Suntime NIYA Wine Co., Ltd., JinLiufu Winery Co., Ltd., and Impresseion Winery to set up vineries, fermentation stations and wine-making bases. Some famous foreign enterprises such as Philippine Continent Group, Italy Rodia S.P.A.(Vermouth producer) and France Arrive S.P.A. have successively set up wine chateau or plant cultivation center here in the form of joint venture or whole foreign-owned enterprise.