Blow to SA wine: Mass closure of cellar doors, vineyards and wine bottling
The operations of award-winning vineyards and cellar doors – including Chapel Hill in McLaren Vale – are among numerous SA wine sites being shut down by the owner of Dan Murphy’s.
Wine and liquor giant Endeavour Group will sell the famed Chapel Hill’s vineyards and heritage cellar door as part of a business restructure impacting numerous wine sites across the state.
Announced this morning, the company that owns Dan Murphy’s and BWS is also selling off vineyards and cellar doors at Riddoch Coonawarra and Krondorf Barossa, and will close a McLaren Vale bottling facility later this year.
The company planned to slash its grape production by more than 80 per cent in a bid to reduce investments in its grape growing portfolio, it said in a statement.
Chapel Hill’s cellar door – based in a 150-year-old chapel in McLaren Vale – is slated for a late June shut down, according to Endeavour Group, as it switches focus to its retail rather than production business.
While the Chapel Hill, Riddoch Coonawarra and Krondorf Barossa brands will be retained by Endeavour Group, InDaily understands Endeavour will now move to negotiate buying grapes from those same vineyards to continue making its wine under the same brand names after the sales.
McLaren Vale Wine Region CEO Erin Leggat said the news was a “huge disappointment” and feared for job losses in the famed wine region.
“Chapel Hill is one of those icon brands for the region so this is a glaringly obvious statement of the state of the industry when one of the most profitable companies in the Australian beverage market isn’t making money,” she said.
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“It reiterates our calls that we need a lot of support from both state and federal governments.
“These closures will also represent considerable job losses for our region, the impact of which will be felt across all businesses throughout the region and throughout the regional community.”
The revered Chapel Hill brand saw its chief winemaker Michael Fragos win world winemaker of the year at London’s 2007 International Wine and Spirit Competition.
And Chapel Hill is revered for its flagship Shiraz, Grenache and Cabernet Sauvignon, which have also won a series of Gold medals in prestigious international competitions.
Chapel Hill’s portfolio includes the ironstone chapel built in 1865 that is currently a tasting room, a nearby chalet-style guest house with “sweeping views of the Onkaparinga Gorge and to the Gulf St Vincent” along with 40 hectares of vineyards.
The first wines were made from grapes grown in paddocks surrounding the chapel in 1975, and a decade later it was exclusively owned by Adelaide’s well-known Gerard family, who employed award-winning winemaker Pam Dunsford.
Dunsford went on to become one of the most famous female winemakers in Australia.
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Endeavor Drinks, which owns Dan Murphy’s, BWS, and more than 2000 retail stores and hotels across the country, bought Chapel Hill in 2019 from Swiss billionaire Thomas Schmidheiny, who also owns wineries in California, Switzerland and Argentina.
Endeavour will also reduce its winery operations from seven sites to three, with Dorrien Estate in the Barossa Valley is being retained as a “strategically important asset”, as well as Cape Mentelle in the Margaret River and Isabel Estate in the Malborough region of New Zealand.
While Vinpac Angaston, a high-scale packaging facility in the Barossa Valley where Endeavour has invested $25 million, will be retained by the drinks giant.
It will close the Vinpac McLaren Vale bottling facility later this year. Endeavour has been leasing this site, which is smaller than the Barossa sister facility.
Endeavour Group managing director and CEO Jayne Hrdlicka said the announcement reflected “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,” Hrdlicka said.
The move comes alongside significant pressure on the wine sector, which is calling for government support, one industry leader noted “Victoria invests more than four times as much per $1000 of wine export value as South Australia”.
While earlier this month, the industry slammed the lack of support for it in the federal budget, claiming growers were left in the lurch.
“This budget is a bitterly disappointing outcome for an industry under significant and sustained strain,” Australian Grape and Wine CEO Lee McLean said.
“We did not ask for a handout. We put forward practical, targeted measures to support an orderly transition, reduce long-term costs, and minimise the impact on regional communities. Once again, the Government has chosen not to act.”
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