Treasury Wine Estates has announced the closure of the Karadoc commercial winery in north-west Victoria by the middle of next year.
The company says it is in response to changing consumer preferences and to enable the company to focus on continued 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 while 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 percent of the capacity that the site is built to process.
“Given 70 percent of costs at Karadoc are fixed, processing less volume means the cost of running the site is substantially higher.
“Combine this with rising costs and unfortunately as a result, we’ve made the difficult decision to close our Karadoc winery from mid-2024, which is hard news to share with our loyal team, the local community and partners.
“We’re committed to assisting our team members to find future employment and continuing to support the local winemaking industry.”
Approximately 60 TWE team members will be impacted and the company will work with each team member to support them in finding alternative employment as the site transitions to its closure.
“Our Karadoc teams have been making quality wines for 50 years and should be proud of everything they’ve achieved in that time,” 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.”
The Karadoc winery has been in operation since 1973 and makes wine for TWE brands including 19 Crimes, Lindeman’s, Wolf Blass, and Yellowglen.
These brands will continue to be made with long-standing local TWE winemaking partners Zilzie Wines and Qualia, and at TWE’s Barossa winery.
“We have a long and proud history that spans multiple decades with Zilzie Wines and Qualia which includes producing our well-known and loved wine brands that are enjoyed by consumers around the world,” Petty said.
“We look forward to continuing working with them to make our brands at their local sites in Sunraysia.”
As part of the Karadoc winery closure, TWE plans to 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).
“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.
“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.
“This has meant divesting some of our vineyard assets but also looking at opportunities to expand our footprint in new locations for future growth.
“Last year we acquired Beenak Vineyard in Victoria’s Yarra Valley, as well as Château Lanessan in Bordeaux, France and we hope to share further updates in this space soon.”
Photo: Sunraysia Daily.