E. & J. Gallo Winery, the nation’s largest wine producer, will lay off more than 350 workers as it shifts its distribution in California.
According to filings with California’s Employment Development Department, 355 California employees will lose their jobs. The filings were dated Jan. 10, with layoffs effective March 12.
The move comes two weeks after Gallo finalized a deal with Texas-based Republic National Distribution Co. to take over its California retail-chain distribution business, which previously had been handled in-house by Gallo Sales Co.
Republic National previously took over Gallo’s independent-market distribution in 2021.
The layoffs were first reported by the San Francisco Business Times. Gallo did not immediately respond to MarketWatch’s request for comment, but told the Business Times it is “optimistic” that many of the affected employees will be able to interview for similar jobs at Republic National.
The layoffs come after years of expansion for privately-held Gallo, which completed an $810 million purchase of about 30 wine labels from beverage giant Constellation Brands Inc. STZ, -0.19% in 2021. It produces about 130 wine and spirit brands, including Barefoot, Clos du Bois, Manischewitz, Ravenswood and New Amsterdam vodka.
A wine-industry report earlier this month found a decline in the volume of wine consumed in the U.S. for the past two years, following a brief 2020 pandemic spike.
Two recent surveys found that while inexpensive wines — $11 or less a bottle — still make up the bulk of U.S. sales, consumers are turning to luxury wines — $21 and up — more often.
Read more: This price represents the ‘sweet spot’ in what people are willing to pay for a bottle of wine these days
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