Australia’s biggest wine producer will shut down one of its Victorian wineries, leaving about 60 vintners and staff out of a job.
ASX-listed Treasury Wine Estates announced it would sell its Karadoc winery by mid-2024, saying the change would allow the company to focus on its luxury and premium wine portfolios.
The move comes amid increasing costs and declining commercial wine consumption and follows the Chinese government’s suspension of Australian wine imports in 2020.
Treasury Wine Estates Chief Supply Officer Kerrin Petty cited China as one of the reasons for the closure but noted that “there’s different reasons in the United States and different reasons in Europe as well.”
“Globally, the wine industry is seeing consumers shift away from commercial wine [which is less than A$10 (US$6.68) a bottle],” she said.
“Making the decision to close a site is something we take very seriously and is a last resort after we’ve looked at all other possible options.”
Petty noted that the company expects commercial volumes at Karadoc to continue to decline over the coming years, leading to “a substantial increase in running costs due to the site’s fixed expenses.”
“Regrettably, this has resulted in the difficult decision to close our Karadoc winery from mid-2024.”
Treasury Wine Estates is Australia’s biggest wine producer by revenue and total production.
Karadoc Winery has operated since 1973 and makes wine for brands including Lindeman’s, Wolf Blass and Yellowglen.
“We’re proud of our team here. They’ve done an incredible job across the 50 years,” Petty said.
“Our Karadoc teams have been making quality wines for 50 years and should be proud of everything they’ve achieved in that time,” Ms. Petty said.
“We’re privileged to have some of the best winemakers and producers in the world at this winery, and we’re grateful for their contribution to the business and the broader wine industry.”
Petty noted that the company would assist Karadoc’s 60-odd workers to find new jobs in the local winemaking industry.
“Many of our staff have sort of grown up making wine here, and we’re very thankful for that.
“We’re speaking to local government and other employers to make sure their future is as secure as it can be.”
The company plans to sell the site after its closure, as well as vineyards in Lake Cullulleraine in northwest Victoria and Yankabilly in southwest NSW.
“We continually review our global vineyard assets to ensure they’re in the best possible places to grow our premium and luxury portfolio,” Petty said.
In its 2022 figures, Wine Australia revealed that overall volumes were down 17 percent to 619 million litres resulting in a 30 percent decline in the value of exports to AU$2.03 billion (US$1.45 billion).
The country has 65 wine regions, including the Hunter Valley in NSW, Barossa Valley in South Australia, and the Yarra Valley in Victoria.
