Australian vintner Salena Estate Wines has appointed administrators as it struggles to stay afloat amidst the country’s trade war with China.

Its administrators, accounting firm KPMG, said the winery was “heavily” affected by trade tariffs imposed by China on Australian wine in 2020.

“As voluntary administrators, our initial focus will be to stabilise the business as it continues to trade normally,” KPMG administrator and turnaround and restructuring partner Tim Mableson said.

“At this stage we will be seeking a restructure or a sale of the business and will work with all stakeholders, including employees, suppliers and customers, to maximise the outcome for all parties.”

Salena Estate Wines owns a 250-hectare winery in the Riverland region of South Australia. It was founded in 1998 by Bob Sylvia Franchitto. Its brands include Twisted Sticks and The Timekeeper.

The estate also provides contract bottling, bulk-wine and private-label services. It has an annual production capacity of 15,000 tonnes.

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Sales of Australian wine have been in decline over the past five years as China’s hefty tariffs combined with decreasing consumption and inflationary pressures on consumers.

Worth over AUD1bn (US$690m) annually at its peak, the sudden cut to the Chinese export market in late 2020 left some winemakers with full tanks while harvests were underway.

Last month, Mark Lewis, founder of Cape Landing in Margaret River, told Just Drinks the tariffs had been “a good lesson for Australia to get more diverse”.

“I think the big lesson for Australia is don’t have your eggs too tied up in the Chinese egg market because they’ve shown they can be unpredictable,” he said.

Australia’s wine harvest for 2022-23 reached a 15-year low as the industry attempted to tackle historically high inventory levels and challenging weather.

In the 2022-23 year, winemakers produced 964m litres, the lowest volume since the 2006–07 vintage and the first time it has fallen below 1bn litres since then, according to trade body Wine Australia.

Wine Australia market insights manager Peter Bailey said: “[The reduced harvest volume] is a move in the right direction for the sector as it responds to the challenge of rebalancing supply and demand.

“However, it is only a small reduction after the lowest vintage in 20 years and stocks of red wine remain at historically high levels.”

Read more from Australian winemakers at the Wine Australia trade tasting