grapes and wine selling for less than the cost of production
After nearly thirty years of crafting bold South Australian reds, Heartland Wines has entered voluntary administration with $3.6 million in debt — not as an isolated stumble, but as a visible fracture in an industry beset by forces it cannot easily outrun. Australia's wine sector faces a convergence of oversupply, the loss of its most valuable export market to Chinese trade tariffs, and a generational turn away from alcohol that no marketing campaign can simply reverse. What is unfolding across the vineyards of South Australia, Victoria, and Tasmania is less a series of business failures than a structural reckoning with assumptions that once seemed permanent.
- Heartland Wines' stock, once valued at $3.13 million on paper, could realise only $1.6 million in practice — a gap that quietly measures the distance between what the industry believed it was worth and what the market will now bear.
- More than 2 billion litres of Australian wine sit in storage, domestic sales have hit near-historic lows, and exports have collapsed by a third since China's 2021 anti-dumping tariffs severed the industry's most lucrative channel.
- Major producers are not waiting — Treasury Wine Estates absorbed a $650 million loss, Endeavour Group is divesting from iconic cellar doors, and respected winemaker Darren De Bortoli has begun uprooting shiraz vines he can no longer afford to harvest.
- Beneath the tariffs and oversupply lies a harder problem: Generation Z is structurally disengaging from alcohol, removing an entire consumer cohort the industry had counted on to sustain demand.
- Heartland's creditors face recovering as little as 4.5 cents on the dollar, while a July 20 meeting will determine whether a deed of company arrangement can salvage anything — employees, at least, remain paid and employed for now.
- The industry stands at a crossroads between managed contraction and prolonged crisis, with no single lever — not trade diplomacy, not marketing, not price cuts — capable of addressing all the pressures simultaneously.
Heartland Wines, an Adelaide-based producer of bold shiraz and cabernet sauvignon with nearly thirty years behind it, entered voluntary administration last month carrying $3.6 million in debt. Administrators from Clifton Hall were appointed to explore sale or recapitalisation options. The gap between the company's book value of $3.13 million and the $1.6 million its assets are expected to realise tells a quiet story about the condition of Australian wine more broadly.
The collapse is symptomatic of an industry under pressure from multiple directions at once. Wine Australia estimates more than 2 billion litres sit in storage. Domestic sales fell 3 percent in 2025 to their second-lowest volume since 2007–08. Exports have dropped by a third since China imposed anti-dumping tariffs in 2021, severing what had been the sector's most valuable market.
The retreat of major players underscores how serious the contraction has become. Treasury Wine Estates posted a loss of nearly $650 million in February. Endeavour Group announced plans to divest from vineyards and cellar doors across South Australia, Victoria, and Tasmania — including Riddoch Coonawarra and Krondorf Barossa. Winemaker Darren De Bortoli described the downturn as nasty and unavoidable, and has begun pulling shiraz vines from the ground in New South Wales because grapes were selling for less than the cost of growing them.
De Bortoli pointed to a shift that may outlast any tariff dispute: Generation Z is not drinking alcohol at the rates previous generations did, driven by health consciousness and changing consumption habits. For an industry built on assumptions of steady domestic demand and export growth, losing an entire generational cohort is an existential challenge, not a temporary correction.
Heartland's employees remain in place with no outstanding wages or superannuation owed. A creditors meeting on July 20 will consider a deed of company arrangement that would return unsecured creditors between 4.5 and 5.3 cents on the dollar. The related entity Glaetzer Wines was unaffected. Whether the broader industry can stabilise around a smaller, leaner footprint — or whether this is the opening chapter of a longer contraction — remains the question no one in Australian wine can yet answer.
Heartland Wines, a red wine producer that spent nearly three decades building a reputation for bold shiraz and cabernet sauvignon, entered voluntary administration last month with debts of $3.6 million. The Adelaide-based winemaker, located in Norwood in the city's east, appointed administrators Daniel Lopresti and Anna Agostino of Clifton Hall to explore options for sale or recapitalisation. On paper, the company's stock had been valued at around $3.13 million. When directors John Collett, Ben Glaetzer, and Nick Keukenmeester assessed what could actually be recovered, that figure dropped to $1.6 million—a gap that tells its own story about the state of Australian wine.
The collapse is not an isolated failure but a symptom of something far larger. Australia's wine industry is contracting in ways that ripple across production, employment, and regional economies. The numbers are stark: Wine Australia estimates more than 2 billion litres of wine sit in storage—enough to fill nearly 860 Olympic swimming pools. Domestic sales fell by 3 percent in 2025 to 443 million litres, marking the second-lowest volume since 2007–08. Exports have been even more brutal, collapsing by a third since China imposed anti-dumping tariffs in 2021, cutting off what had been the industry's most valuable market.
Major players are already retreating. Treasury Wine Estates, which owns Penfolds and a portfolio of other recognisable labels including 19 Crimes and Squealing Pig, posted a loss of nearly $650 million in February. Endeavour Group, the owner of Dan Murphy's and BWS, announced in May that it would divest from vineyards and wineries across South Australia, Victoria, and Tasmania, including the famous cellar doors Riddoch Coonawarra and Krondorf Barossa. The company also signalled plans to drastically reduce grape production and investment in Australian viticulture.
One of the country's most respected winemakers, Darren De Bortoli, recently made the decision to uproot shiraz vines in the Riverina and Rutherglen regions of New South Wales. In an interview with A Current Affair, he described the market downturn as nasty and unavoidable. The economics had become impossible: grapes and wine were selling for less than the cost of production. Pulling out the vines was not a choice but a necessity. De Bortoli singled out shiraz as facing a particularly severe collapse in demand, and he pointed to a demographic shift that may prove more intractable than any tariff or oversupply problem.
Generation Z, he said, is simply not drinking alcohol at the rates previous generations did. The reasons are multiple—health consciousness, anti-carb sentiment, and a broader shift in consumption habits. This is not a temporary market correction but a structural change in how younger Australians relate to wine. For an industry built on the assumption of steady domestic demand and export growth, the loss of an entire generational cohort of consumers represents an existential challenge.
Heartland Wines retained all its employees through the administration process, and there were no outstanding wages or superannuation owed at the time administrators took over. The company is expected to continue trading while options are explored. A creditors meeting scheduled for July 20 will consider a deed of company arrangement that would return unsecured creditors between 4.5 and 5.3 cents on the dollar. The related entity Glaetzer Wines was not affected by the administration.
What Heartland Wines represents, then, is not a single business failure but a visible fracture in an industry under pressure from multiple directions at once. Chinese trade sanctions removed a crucial export market. Oversupply has crushed prices. Younger consumers are turning away from wine altogether. The combination has forced producers to make brutal choices—pulling up vines, closing cellar doors, writing down assets, and in some cases, walking away entirely. The question now is whether the industry can stabilise or whether what we are seeing is the beginning of a longer contraction.
Citas Notables
We just can't continue to grow grapes and make wine and have the market prices way below the cost of production. It was just the reality that we had to bite the bullet.— Darren De Bortoli, winemaker
Generation Z is probably the most disconcerting thing… they're just not consuming alcohol generally.— Darren De Bortoli
La Conversación del Hearth Otra perspectiva de la historia
Why does a single winery's collapse matter enough to signal something bigger?
Because Heartland Wines wasn't struggling alone. When a 30-year-old producer with award-winning wines can't survive, it tells you the problem isn't bad management or poor product—it's the market itself. The company had real assets, real reputation, real employees. It still couldn't make the numbers work.
The oversupply figure—2 billion litres—that's almost incomprehensible. How did it get that bad?
Growers planted for a market that no longer exists. China was buying Australian wine aggressively until 2021. Then the tariffs hit, and suddenly you had production capacity designed for export volumes that evaporated. Domestic demand couldn't absorb the gap. So wine just accumulated in storage.
De Bortoli pulling up shiraz vines—that sounds like a farmer admitting defeat.
It is. But it's also rational. If you're spending money to grow grapes that sell below production cost, you're losing money every harvest. At some point you stop and cut your losses. The question is how many other producers reach that same conclusion.
Generation Z not drinking wine—is that permanent or cyclical?
De Bortoli seemed to think it's structural. It's not just wine; it's alcohol generally, and it's tied to health awareness and changing social norms. If that's true, the industry can't wait it out. It has to fundamentally change what it produces and who it's trying to reach.
What happens to the wine regions themselves if this contracts further?
Employment disappears. Tourism dries up. Regional economies that depend on cellar doors and harvest work face real hardship. Heartland Wines kept its staff, but if the broader industry shrinks, those jobs won't exist to keep.