The challenges facing Australia’s wine industry have come into even sharper focus today, with Treasury Wine Estates announcing the closure of one winery and the planned divestment of two others.
The group, which is in the midst of a business unit review for ‘Treasury Premium Brands’, will shutter its Karadoc facility in the state of Victoria next year. At the same time as confirming the measure, Treasury said it is looking to sell its “commercial vineyards” in Lake Cullulleraine in north-west Victoria and Yankabilly in south-west New South Wales.
The moves have been blamed on what the company described as a “global decline in commercial wine consumption, rising costs and under-utilised capacity at the [Karadoc] site”.
The announcement comes in the same week as Australian Vintage commenced a review that includes a full sale of the company as an option.
“A number of factors contribute to our shifting vineyard footprint including changing consumer trends and wine preferences as well environmental changes such as higher temperatures and reduced access to water,” said chief supply officer Kerrin Petty. “This has meant divesting some of our vineyard assets but also looking at opportunities to expand our footprint in new locations for future growth.
The production of brands – including 19 Crimes, Lindeman’s, Wolf Blass and Yellowglen – that has been handled at Karadoc will be taken on by two existing contract partners as well as Treasury’s Barossa winery in South Australia.
In results for the six months to the end of December, reported in February, Treasury noted a 4.5% dip in year-on-year sales from the Premium Brands unit, which handles the company’s lower-priced “commercial” wine portfolio. The figures from fiscal 2023 – to the end of June – will be announced in mid-August.
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