A five-year decline in wine industry sales has affected wineries across the board, from large corporations to small family-run operations.
The main driver of the wine industry’s decline was a drop in total industry sales of $19.7 billion, or 21%, from 2020 to 2025, falling from $94 billion in 2020 to $74.3 billion in 2025, according to Silicon Valley Bank’s US wine industry report.
Major wine companies, including the largest in the country, E. & J. Gallo, along with another multi-label owner, Jackson Family Wines, permanently closed wineries this year.
Small family-owned wineries, such as California-based Robledo Family Winery Inc., have been forced to file for bankruptcy protection, as the Sonoma, Calif., award-winning company filed for Chapter 11 protection on April 8.
Hilltop Winery in Paka files for bankruptcy
And now, distressed Texas winery and vineyard Hilltop Winery at Paka Vineyards LLC has filed for Chapter 12 bankruptcy protection to restructure its debt and restructure its business, Chron.com reports.
The Meadow, Texas-based family winery operation filed its application, No. 26-50117, in the US Bankruptcy Court for the Northern District of Texas in Lubbock on April 6, lists $10 million to $50 million in assets and $1 million to $10 million in liabilities, Bankruptcy Observer reports.
Chapter 12 rules are different from Chapter 11
Chapter 12 filings are rare, compared to Chapters 7, 11, and 13, as they are only prepared for family farmers or fishermen, and the debt ceiling is $10 million. Chapter 12 law allows a debtor to file a payment plan within 90 days of filing, instead of up to 120 days in Chapter 11, but Chapter 12 filing fees are much lower, according to the web page of law firm Weltman, Weinberg & Reis Co., LPA.
Creditors are also allowed to make seasonal payments to coincide with their income from farming or fishing.
Different tax credits
Tax credits are different, too. For example, if a family farmer sells assets during a Chapter 12 case, any taxes due from the sale are considered unsecured and may be excluded from the case and are not required to be paid, according to the Weltman, Weinberg & Reis web page.
The company owes about $3.1 million and has more than $19 million in assets, but only $6,426 in cash, according to court documents.
Major wine companies closed their wineries
IE. & J. Gallo has permanently closed its Ranch Winery in St. Louis. Helena, Calif., and laid off all 56 employees on April 15, 2026, the company disclosed in a Workforce Adjustment and Retraining Notice (WARN).
Jackson Family Wines, which makes 40 varieties of wine, permanently closed its Carneros Hills Winery in Sonoma, Calif., and laid off 13 employees on April 17, 2026, according to a WARN notice filed with the California Department of Employment Development.
File requests for small wineries
Small wineries having a hard time during the wine slump include Kerman, Calif., vineyard owner and winemaker Sran Vineyards LLC, which filed for Chapter 11 on Feb. 23 to avoid a public auction of its assets, according to Bondoro.
Also, 30-year-old California company Aloria Vineyards filed for Chapter 11 bankruptcy on February 24 to reorganize its business and continue operating as a going concern but did not list a specific reason for its filing.
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This story was originally published by TheStreet on May 3, 2026, where it appeared first in the Marketing section. Add TheStreet as a favorite source by clicking here.
