Penfolds and Rosemount wines producer Treasury Wine Estates is to close the 130-year-old Ryecroft winery in McLaren Vale in order to cut costs.
The Rosemount cellar door in McLaren vale. It will remain open after the Ryecroft winery shuts. Image: Treasury Wine Estates
Wine has been made at Ryecroft since the 1880s, but current owner Treasury said today (10 November) that it can no longer afford to run the winery. It will not produce wine from the 2015 harvest.
Treasury is seeking to reshape its business following a series of disappointing financial results, which culminated in a net loss of A$100.9m in its last fiscal year.
Ryecroft’s 33 employees were informed of the impending closure this morning, and the firm said it would try to relocate as many as possible within its business. It has nine other wineries and three bottling plants across Australia, according to its 2014 annual report.
‘This is a tough but necessary action,’ said Treasury’s head of production for Australia and New Zealand, Peter Taylor. ‘Unfortunately, Ryecroft has been operating at around half its capacity for several years now, and it is simply not sustainable for this to continue.’
Ryecroft’s primary focus was producing wines for the Rosemount brand. Rosemount has traditionally relied heavily on the US market, which has been a particular source of financial woe for Treasury both as an independent company and when the business formed part of Foster’s Group prior to 2011.
‘Rosemount remains a valued brand within Treasury’s wine portfolio and will continue to be made at other South Australian wineries in the company’s network,’ said Taylor. Treasury still owns 900 hectares of vines in the Fleurieu Peninsula that includes McLaren Vale, south of Adelaide.
Ryecroft’s Recent History
The historic winery has been at the centre of significant upheaval in Australian wine in recent years.
- It was bought by Rosemount founder Bob Oatley in 1991.
- In 2001, Oatley relinquished control of Rosemount to Southcorp via an A$1.5bn merger deal, and subsequently sold his remaining 18.8% stake to Foster’s Group for A$584m.
- In 2005, Foster’s acquired Southcorp, which included Penfolds and Lindemans, as well as Rosemount.
- But, Foster’s struggled to make its wine business profitable enough. After failing to find a buyer, Foster’s spun-off wine from its core brewing arm, which led to the birth of Treasury Wine Estates in May 2011.
- In September 2014, Treasury said two A$3.2bn takeover offers for its business had collapsed after talks with private equity consortiums broke down.
Written by Chris Mercer