Too many grapes, not enough drinking lead to glut of wineries for sale
The winery and vineyard market is at a tipping point amid struggling sales, with an increasing number of sellers – from large corporates to smaller vintners – deciding to put their properties on the market, leading to subdued prices.
A surplus of fruit, the turn by younger people toward drinking less alcohol or none at all, and a surge in online wine sales – detracting from visits to cellar doors – are behind the oversupply of wineries and vineyards up for grabs, according to industry sources.
Billionaire winemaker John Casella, managing director of one of Australia’s biggest privately owned wine groups Casella Family Brands, tested the market in August with a portfolio of eight South Australian vineyards, spanning 458 hectares.
The vineyards, located in the state’s McLaren Vale and Adelaide Hills wine regions, are still for sale.
Treasury Wine Estate, the country’s largest wine producer, is planning to slash its exports by 700,000 cases over the next two years to China and US to help stabilise prices in the face of a weaker demand,
Adam Morris, managing director at Monopole Group, said instability and corporate activity among the top five producers, especially the listed and private equity-backed companies, has had a flow on effect into the middle market – large, typically family-owned enterprises valued at $20 million to $50 million.
“In previous years, the listed businesses would be the natural buyers for established, authentic brands that have outgrown private ownership or are seeking an exit for other reasons, such as succession,” he told The Australian Financial Review.
“If TWE (Treasury Wine Estates), Vinarchy, AVG (Australian Vintage) and Endeavour Group are on the sidelines in terms of seeking acquisitions, it impacts the next tier of medium-large family or corporate operators.
“Once these major businesses find their feet again I’m sure activity will return as there are some high-quality assets available or about to be.”
The pool of prospective buyers for some of the nation’s biggest winery and vineyard deals remains diverse, ranging from hoteliers to sports stars.
UK’s wealthy Vestey family sold The Lane Vineyard, a mid-sized winery in the Adelaide Hills, to hotelier David Horbelt for about $15 million in July. Horbelt, who runs Australian Bespoke Collective with business partner Malcolm Bean, also operates Sequoia Lodge and Mount Lofty Estate in the Adelaide Hills, and The Reef House Adults Retreat in north Queensland.
In June, a syndicate involving well-known sports stars such as Australian cricketer Alex Carey, Adelaide Crows player Izak Rankine and former AFL defender Brodie Smith snapped up Bethany Wines for an undisclosed sum.
Richmond Grove Winery was offloaded by one of Australia’s biggest wine processing facilities Pernod Ricard Winemakers, now part of Vinarchy, for about $9 million towards the end of 2025.
Outside South Australia, luxury hotel group HVL Hotels snapped up two Hunter Valley wineries for a combined $25 million sold by industry veterans Brian McGuigan and Col Peterson.
Chris Algie, agribusiness associate director at Herron Todd White, said a number of larger scale vineyards purchased this year looked as though they were going to be redeveloped for alternative horticultural pursuits, such as in areas like Langhorne Creek.
“This trend is also evident in warmer, inland areas, with a number of wine grape vineyards purchased for redevelopment to other permanent tree crops such as olives, table grapes and citrus,” he told the Financial Review.
“Buyers are, however, quite selective, only targeting properties that have suitable soil types.”
Online wine sales had continued to grow, but at the expense of traditional cellar door outlets, Algie said.
“The high labour requirement associated with operating cellar doors, combined with cost of living pressures has impacted on the percentage of wine sold this way,” he said. “Cost of living has placed pressure on households which have seen people reassess their wine budgets.
“There appears to be a shift in how wine is consumed globally with younger generations drinking less than previous generations.”
Tim Altschwager, agribusiness national director at Colliers, said it was no secret it had been a pretty tough year in the industry with the oversupply of fruit.
“At the bigger end, where maybe the growers rely on the wine companies purchasing their grapes, [they’re] the ones who are finding it hard,” he told the Financial Review. “Some of those wine companies are pulling out of contracts because they’ve got too much supply.
“It’s probably come to a tipping point where we really need to reduce supply and balance it to the demand really.”
