Australia’s booze giant, Endeavour Group, has decided that growing its own grapes is officially more hassle than it's worth. The company, which dominates our local drinking culture through Dan Murphy’s and BWS, just announced a massive retreat from wine production. They're offloading key vineyards across South Australia, Victoria, and Tasmania, and shuttering the VinPac bottling facility in McLaren Vale by the end of the year.
This is a bold move for a firm that has spent years building a vertical empire. While they're keeping their big-name labels like Chapel Hill, Riddoch Coonawarra, and Krondorf Barossa, they'll stop the hands-on work. Instead, they plan to buy their grapes from the open market. They're framing this as a “strategic transformation,” which is corporate speak for “they're cutting the dead weight to protect the bottom line.”
It's interesting to see someone like Endeavour, one of the most profitable companies in the Australian beverage market, not seeing value in some of these iconic brands.
That take comes from Erin Leggat, the chief executive of the McLaren Vale Wine Region. She isn't mincing words, and she isn't the only one feeling the sting. For a town like McLaren Vale, watching a major player pull up stakes isn't just business news; it feels like a genuine vote of no confidence in the region's future. Leggat warns that the closure of the VinPac plant will likely kill local jobs and push up bottling costs for the smaller winemakers left behind.
Lee McLean, the chief executive of Australian Grape and Wine, isn't shocked by the news. He's been watching the industry spiral as the supply glut moves from cheap, bulk-produced wine into the premium categories. For a long time, the narrative was that only the inland regions—like the Riverland or the Murray Valley—were hurting. Now, the pain has climbed up the hill to the premium producers, and there's nowhere left to hide.
Most drinkers might not notice a change at the checkout counter just yet. Producers are already squeezed so thin that they're absorbing rising costs rather than passing them on, because they know they'd lose customers in a heartbeat if they hiked prices. The wine industry is deadset competitive, and right now, it's a race to the bottom that nobody is winning.
The industry is facing a crisis caused by unsustainable expansion over the last two or three decades. Bruce Redman, the director of Redman Wines, knows this cycle better than most. His family has been making wine in the Coonawarra region since 1901, and he's spent 40 years watching the industry ebb and flow. He sees this current crisis as a direct result of the massive expansion that took place over the last couple of decades.
The market correction that's underway is brutal and will claim casualties. It's a hard pill to swallow for families like the Redmans, who are trying to hold their ground while others exit the stage. Yet, there's a glimmer of hope as they've recently managed to buy back the Rouge Homme brand, which they had to offload way back in the 1960s.
While the industry struggles, the focus remains on the sheer volume of grapes that nobody seems to want. For the last two vintages, even high-quality fruit from places like McLaren Vale has been selling for less than the cost it takes to grow it. This is a miserable reality for growers who were promised a golden era but are now staring down the barrel of a multi-year recovery.