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Penfolds maker Treasury Wine Estates will shut down one of its Victorian wineries used to make budget brands such as 19 Crimes and Wolf Blass and sell two vineyards, putting 60 jobs on the line as the popularity of cheaper wine continues to decline.

Treasury Wine chief supply officer Kerrin Petty said it had become impossible to keep the winery in Victoria’s north-west town of Karadoc open, as consumers around the world move away from commercial wine – which sells for less than $10 a bottle – while production costs continue to rise.

Treasury Wine is closing down one of its wineries and selling two vineyards.

“Making the decision to close a site is something we take very seriously and is a last resort after we’ve looked at all other possible options,” Petty said in a statement on Wednesday morning.

The ASX-listed global wine exporter said it expected commercial-brand wine volumes at the Karadoc site, slated to close in mid-2024, to fall to 60 per cent of its production capacity in coming years, while 70 per cent of costs would remain fixed.

“Processing less volume means the cost of running the site is substantially higher,” Petty said. “Combine this with rising costs and unfortunately as a result, we’ve made the difficult decision to close our Karadoc winery from mid-2024, which is hard news to share with our loyal team, the local community and partners.”

Treasury Wine will seek to sell the site following its closure.

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.

Treasury Wine will also sell two commercial vineyards in Lake Cullulleraine, in north-west Victoria, and Wentworth, in south-west New South Wales, as it focuses on growing its luxury and premium wine portfolios.

“A number of factors contribute to our shifting vineyard footprint, including changing consumer trends and wine preferences as well environmental changes, such as higher temperatures and reduced access to water,” said Petty.

“This has meant divesting some of our vineyard assets, but also looking at opportunities to expand our footprint in new locations for future growth.”

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