A five-year decline in sales in the wine industry has impacted wineries across the spectrum, from the largest companies to the smallest family-owned operations.
A major cause of the wine industry’s crisis has been a decline in total industry sales revenue of $19.7 billion, or 21%, between 2020 and 2025, from a total of $94 billion in 2020 to $74.3 billion in 2025, according to the Silicon Valley State of the U.S. Wine Industry Report. Bank.
Major wine companies, including the country’s largest, E. & J. Gallo, and another owner of dozens of labels, Jackson Family Wines, have closed wineries permanently this year.
Smaller family wineries, such as California-based Robledo Family Winery Inc., have been forced to file for bankruptcy, as the award-winning Sonoma, California winery filed for Chapter 11 on April 8.
Hilltop Winery in Paka files for bankruptcy
And now, troubled Texas winery and vineyard Hilltop Winery at Paka Vineyards LLC has filed for Chapter 12 bankruptcy protection to restructure its debt and reorganize its business, Chron.com reported.
The Meadow, Texas-based family winery operation filed its petition, No. 26-50117, in the U.S. Bankruptcy Court for the Northern District of Texas in Lubbock on April 6, listing between $10 million and $50 million in assets and between $1 million and $10 million in liabilities, Bankruptcy Observer reported.
Chapter 12 rules differ from Chapter 11
A Chapter 12 filing is rare, compared to Chapters 7, 11 and 13, as it is exclusively for family farmers or fishermen, and the debt ceiling is $10 million. The Chapter 12 statute allows a debtor to file a payment plan within 90 days of filing, rather than up to 120 days in Chapter 11, but Chapter 12 filing fees are significantly lower, according to a web page from the law firm Weltman, Weinberg & Reis Co., LPA.
Debtors can also make seasonal payments to align with when they earn income from farming or fishing.
Different tax obligations
Tax obligations are also different. For example, if a family farmer sells assets during a Chapter 12 case, any taxes owed on the sale are considered unsecured and can be removed from the case and do not need to be paid, according to the Weltman, Weinberg & Reis website.
The company owes about $3.1 million in debt and has more than $19 million in assets but only $6,426 in cash on hand, according to court documents.
Large wine companies closed wineries
E. & J. Gallo permanently closed its Ranch Winery in St. Helena, California, and laid off its 56 employees by April 15, 2026, the company disclosed in a Worker Adjustment and Retraining Notification (WARN) notice.