Treasury Wine Estates to close commercial winery

Image courtesy Treasury Wine Estates

Treasury Wine Estates (TWE) have today announced plans to close its commercial Karadoc winery in north-west Victoria by mid-2024. This decision is in response to changing consumer preferences and to enable the company to focus on growth in its luxury and premium wine portfolios.

TWE Chief Supply Officer Kerrin Petty said it was a challenging time for the wine industry globally and whilst the site was able to remain operational throughout the pandemic, the decline in commercial wine consumption along with rising costs meant it was no longer a possibility to keep the winery open in the long-term.

“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 said. “Globally, the wine industry is seeing consumers shift away from commercial wine (less than $10AUD a bottle). Over the coming years, we expect commercial volumes at Karadoc to continue to decline and volumes to be at around 60 per cent of the capacity that the site is built to process. Given 70% of costs at Karadoc are fixed, processing less volume means the cost of running the site is substantially higher.

Approximately 60 TWE workers will be impacted and the company intends to support each team member in finding alternative employment as the site transitions to its closure. Brands such as 19 Crimes, Lindeman’s, Wolf Blass, and Yellowglen will continue to be made with local TWE winemaking partners Zilzie Wines and Qualia, and at TWE’s Barossa winery in South Australia.

As part of the Karadoc winery closure, TWE will list the site for sale. The company also plans to divest its commercial vineyards in Lake Cullulleraine (north-west Victoria) and Yankabilly (south-west New South Wales). Petty cited changing consumer trends and environmental changes such as higher temperatures and reduced access to water as contributing factors to the decision.

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