Penfolds’ Barossa Valley Cellar door to close, along with McLaren Vale’s Shingleback wines cellar door as rising costs hit the sector

A much-loved Barossa Valley cellar door will close and another in McLaren Vale will follow as rising business costs and reduced consumer spending cripple the state’s wine sector.

An iconic Barossa Valley cellar door will close later this year and another in McLaren Vale will follow suit as rising business costs and reduced consumer spending cripple the state’s wine sector.

Treasury Wine Estates, owner of Penfolds, has revealed it will shut down the brand’s historic and much-loved cellar door on Tanunda Road in Nuriootpa, in June.

A Penfolds spokeswoman told The Advertiser that the decision will allow them to “refocus on our spiritual home”, at Magill Estate.

Built in 1911, the Nuriootpa cellar door became the focal point of Penfolds winemaking in the 1970s as the brand expanded away from Magill. Treasury Wine Estates lease the Barossa Valley cellar door site.

The spokeswoman added that their connection to South Australia remains “committed and strong”.

“The Barossa is at the core of Penfolds winemaking, shaping some of our most iconic wines,” she said. “We continue to honour this legacy through our winemaking operations in the region and our ongoing partnership with our growers.”

Last month, delicious.com.au named the venue as one of the “17 of the best places to eat, drink and stay in the Barossa Valley.

Penfolds Barossa Valley cellar door is closing in June. Picture: Penfolds

It comes as Endeavour Group, the company behind McLaren Vale’s Shingleback Wines, announced they will close its cellar door from March 3.

Shaine DeVenny, head of Paragon Wine Estates – Endeavour’s wine arm – said the decision to shut the Stump Hill Road business was made after “tremendous consideration”.

“The difficult landscape of rising operational costs, reduced expendable incomes and tourism fluctuations, like many other hospitality businesses are experiencing, were pivotal factors in this difficult decision,” she said.

Ms DeVenny confirmed Shingleback Wines will continue to operate with sales available through its website and retail channels.

Industry experts say local winemakers are “suffering” in the current economic climate, and the removal of China’s punishing tariffs have not yet provided any relief.

Shingleback cellar door, McLaren Vale. Picture: Supplied.

Shingleback winery, McLaren Vale. Pic: supplied.

Erin Leggat, McLaren Vale Grape Wine & Tourism Association chief executive officer, said rising production, labour and transport costs, coupled with inflation and the downturn of major US and UK export markets, had made it “incredibly tough” for winemakers in the region, 45 minutes south of Adelaide.

“People keep hearing that China is back and we’re all saved but it’s really not the silver bullet for the pain that this industry is in,” she said.

“We lost China for three years, which didn’t help with the surplus of red wine which was in existence... and we’re still seeing the impacts of the Covid pandemic in terms of supply chain disruptions and the costs of logistics and shipping.”

“It’s understandable that some companies may not be able to sustain a consumer-facing cellar door at the moment.”

Penfolds Barossa Valley cellar door is closing in June. Picture: Penfolds

The closures come after McLaren Vale’s Fox Creek Wines went into voluntary administration in October. Chinese trade tariffs, rising expenses and the cost of living crunch impacting tourism and visitation numbers were blamed for the collapse.

Ms Leggat agreed that declining regional tourism had impacted winemakers in the area.

“All the festivals and all the new events like Gather Round and LIV golf haven’t really translated into increased visitation into the regions,” she said.

Wirra Wirra wines chief executive Matthew Deller said wineries across the state were “hurting on every level” with exports down and costs only rising.

“We’re doing all right... but there’s a lot of uncertainty in the industry at the moment,” he said.

Ms Leggat called for more federal and state government support for the crucial sector, and tipped more wineries and cellar doors would close in coming years.

“I would expect there will be quite a few in the SA and Australian industry that will become unviable,” she said. “It’s crunch time.”

Originally published as Penfolds’ Barossa Valley Cellar door to close, along with McLaren Vale’s Shingleback wines cellar door as rising costs hit the sector