AUSTRALIAN WINE INDUSTRY SERIES
The Route-to-Market Squeeze
How Retail Consolidation and Channel Disruption Are Reshaping SME Wine Distribution
A SIXiS Strategy Intelligence Briefing | Updated June 2026
THE INSIGHT
“The four major retailers — Endeavour Group, Coles Group, Metcash, and ALDI — control approximately 80% of the domestic retail market, with Endeavour and Coles alone commanding around 60% combined.”
— Emerson Review, July 2025
The Structural Reality: A Market Controlled by Few
BWS and Dan Murphy’s (both owned by Endeavour Group) captured 62.3% of wine purchases by value in 2023. When Coles Liquor is added, two corporate groups control the majority of wine retail in Australia. For the nation’s 2,156 wineries — two-thirds producing fewer than 5,000 cases — survival depends on navigating a narrow set of gatekeepers or building credible alternative channels.
Coles Liquor consolidated all 984 stores under a single Liquorland banner in 2025, launching 50+ new exclusive and private-label products in the process. Vintage Cellars — historically a supportive channel for boutique wines — ceased to exist as a distinct offering. For independents, this consolidation removed one of the more favourable shelf environments available to them.
Retailer-owned brands compound the problem. Endeavour Group built vertical integration from vineyard to shelf — and then, in a May 2026 reversal, announced it would sell most of its winery and vineyard assets while retaining the brands. The result is an “orphaned brand” problem: labels marketed on heritage and regional
identity, but sourced from 99% purchased bulk wine, competing against genuine estate producers on the same shelf.
JUNE 2026 UPDATE On 22 December 2025, the Government announced a Mandatory Code of Conduct for
Winegrape Purchases, effective 1 January 2027. The Code will be enforced by the ACCC and apply to large and
medium winemakers (annual grape purchases exceeding 2,000 tonnes). Critically, it covers the grower-winemaker
relationship — not the retailer-producer relationship. The retail conduct provisions of the Emerson Review
remain in active consultation. Australian Grape & Wine welcomed the announcement but noted it leaves the
most vulnerable growers — those dealing with winemakers below the 2,000-tonne threshold — without formal
protection.
Direct-to-Consumer: The Imperative Deepens
Wine Australia’s DTC analysis confirms that cellar door and direct channels remain the highest-margin pathway for small producers, yet the customer base is ageing. Baby Boomers and Generation X contribute 77% of DTC sales volume. Unique customer numbers are declining even as per-customer spending increases — wineries are selling more to fewer people.
E-commerce platforms and wine subscription models continue to demonstrate resilience. Building a proprietary digital customer list — an asset no retailer can reach or control — is increasingly the most valuable long-term investment an SME producer can make. The closure of orphaned brand cellar doors (including Chapel Hill’s McLaren Vale operation, closed June 2026) creates a specific opportunity: genuine estate producers with working cellar doors have a newly differentiated claim.
The Three-Part Strategic Response
1
Build Channel Architecture that Reduces Gatekeeper Dependency
A diversified channel mix — DTC, wine club, e-commerce, independent retail, export, on-premise — hedges against the contraction of any single pathway. The most resilient SME businesses are those that have deliberately reduced their reliance on the two major chains, accepting lower volume for higher margin and greater commercial autonomy.
2
Invest in DTC Infrastructure Before the Customer Base Narrows Further
Wine club and subscription models generate materially higher customer lifetime value than casual cellar door sales. Structured membership programs, first-party data collection, and digital marketing capability are not optional extras — they are the core commercial infrastructure of an SME wine business that intends to be viable in ten years.
3
Engage Actively on Emerson Review Implementation
The Mandatory Code for Winegrape Purchases is a first step. The retail conduct provisions — mandatory labelling disclosure, ACCC enforcement of retailer-producer dealings, transparent data sharing — remain in consultation. SME CEOs who submit specific, evidence-based examples of retail power imbalance will have disproportionate influence on the outcome of that process.
The SIXiS Perspective
Australia’s wine distribution landscape has never been more concentrated or more structurally disadvantageous for SME producers. The Coles Liquor consolidation removed a favourable shelf environment. The Endeavour Group restructure created an orphaned brand category that competes with genuine estate producers without the physical reality to justify its marketing. And the Emerson Review’s retail provisions remain, as of June 2026, aspirational rather than enacted.
The question for SME CEOs is not whether to engage with the major chains. Some will and should. The question is whether your business generates enough direct revenue — through wine clubs, cellar door, e-commerce, and export — to give you genuine negotiating leverage when you do. The channel is the strategy. Build yours
accordingly.
CEO Takeaway: If you removed your two largest retail accounts tomorrow, would your business survive? If the answer is no, your channel architecture is not a strategy — it is a dependency. The Emerson Review has created a policy window for structural reform. That window will close. Whether your business model
changes before it does is a decision only you can make.