Endeavour Group is selling the physical assets of Chapel Hill in McLaren Vale along with Riddoch Coonawarra and Krondorf Barossa including the vineyards, but all three brands will be retained.
The Chapel Hill operations including the cellar door will close at the end of June.
Endeavour – which owns Dan Murphy’s and BWS – says that it will also “seek a new owner” for the Oakridge brand and winery in the Yarra Valley.
It will be sold as a going concern and the company says it is “business as usual” at Oakridge.
The company won’t be renewing the lease of Josef Chromy in Tasmania.
“Assets associated with the business are under review and a decision will be made before the end of the lease,” the company says.
Endeavour says it is reshaping the Pinnacle Drinks business to an “asset-light, customer-led portfolio”.
The company says it will reduce it own grape production by more than 80 percent.
“Resulting in approximately 99 percent flexible sourcing of purchased bulk wine and grapes from the viticulture market,” Endeavour says.
Winery operations will be consolidated from seven sites to three, with the remaining three deemed “strategically important for end-to-end regional strength”.
Cape Mentelle in the Margaret River, Isabel Estate in the Marlborough region of New Zealand and Dorrien Estate in the Barossa Valley will be retained as strategically important assets that underpin premium customer propositions, production and sourcing.
A single high-scale packaging facility will be retained at Vinpac Angaston in the Barossa Valley, with the Vinpac McLaren Vale bottling facility to close later this calendar year.
The domestic Pinnacle product range will be further rationalised, sharpening focus on the brands with the strongest retail demand and customer engagement, the company says.
Endeavour Group managing director and CEO Jayne Hrdlicka said, “Todayʼs decisions reflect a clear choice to refocus Pinnacle on its primary role – serving our retail businesses and the customers that drive growth.”
“By concentrating on the brands and assets that customers value most, we are building a more focused private label portfolio.”
A spokesman for Endeavour – which was spun off from Woolworths Group in 2019 – says it will be reducing its own brands by 30 to 40 percent.
Endeavour purchased Krondorf Barossa in 2011, Chapel Hill and Riddoch Coonawarra in 2019, Oakridge Wines in 2021 and Cape Mentelle in 2023.
Endeavour bought Josef Chromy Wines in 2022 in partnership with Warakirri Asset Management, one of Australia’s leading agricultural investment managers.
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