Treasury Wine Estates will shut down its Karadoc winery in Victoria amid rising operational costs and China’s punitive tariffs that have made the wine giant’s commercial wine operation “unstainstable”, according to the company.
The decision to close the winery used to make 19 Crimes and Wolf Blass comes after global consumers moved away from commercial wines that sell for less than $10 dollar a bottle while production costs keep rising, says the group’s chief supply officer Kerrin Petty when breaking the news to 60 winery workers.
Petty says the decision was made after the company has exhausted all other options and continuous operation of the winery at lowered production capacity would be “unstaintable”.
“Over the coming years, we expect commercial volumes at Karadoc to continue to decline, leading to a substantial increase in running costs due to the site’s fixed expenses,” he said.
“Regrettably, this has resulted in the difficult decision to close our Karadoc winery from mid-2024.”
Karadoc has been operating since 1973 and produces wines for the company’s 19 Crimes, Lindeman’s, Wolf Blass and Yellowglen brands. After its closure, these brands will continue to be made through Treasury Wine’s Barossa Valley winery, as well as through its winemaking partners Zilzie Wines and Qualia.
According to Petty, one of the key reasons for folding the winery operation is due to prolonged China trade freeze on Australian wines.
“China is one of those reasons, where the door’s closed there, but then there’s different reasons in the US and different reasons in Europe as well,” Petty said.
There were signs of easing tensions between China and Australia. In April, the two countries ended a trade dispute on barley, and an upcoming trip by Australian Prime Minister Anthony Albanese’s trip to China later this year is expected to push for an end to remaining trade blocks to Australian goods including wine.
