Gallo will soon be shutting down their 300,000 square-foot winery on the north end of San Miguel in San Luis Obispo County.
The Modesto-based company, the world’s largest wine maker, will be permanently laying off 47 production workers effective Sept. 8, according to a state WARN notice.
The notices are published in order to give workers a 60-day notice of impending layoffs. The facility is located at 2425 Mission St. in San Miguel.
The winery is the former Courtside Cellars facility purchased by Gallo back in 2012. The facility both made wine and ran a bottling line in San Miguel, just north of Paso Robles.
The closure, though a surprise to some, has been common knowledge, say wine industry sources. Gallo representatives were not available for comment.
Most recently, the California wine industry has been struggling with lower sales and a downturn in consumption among the younger set. The decline in sales has hit the lower priced wines that Gallo markets.
Gallo has been downsizing across the state and locally with the sale of two wine making facilities in San Luis Obispo in the past year. They include the sale of the Edna Valley Vineyard facility in the south county and the former Wild Horse winery in the Templeton area, also last year.
Gallo sold the former Wild Horse facility for $8 million to Continental Wine Collection, according to published reports. Gallo retains the Wild Horse brand.
Gallo was founded in 1933 by Ernest Gallo and Julio Gallo of the Gallo family, and is the largest exporter of California wines, according to Wikipedia.
It is the largest wine producer in the world, producing over 3% of the world’s annual supply of 35 billion bottles with an annual revenue of $5.3 billion. It is also the largest family-owned winery in the United States.
Gallo employs about 3,500 people in Modesto and 2,500 in other parts of the state, country, and world.
The downturn in the wine market has hit the California wine industry hard as can be seen from those counties that have published their 2024 Crop Reports.
That includes Santa Barbara County, which reported winegrape values down 28% from the year before, Monterey County reporting decline of 22% and Napa County announcing winegrape values down 14.4% as well as a decline in production of 23,632 tons or almost 14%.
San Luis Obispo County has yet to report, but is expected to follow a similar trend.
Allied Grape Growers continue to advocate for vineyard removals across the state, including on the Central Coast. But the industry group says coastal growers brought more bearing acres into production in 2024 than vine acreage was pulled.
Migration News says California harvested 2.8 million tons of wine grapes in 2024 but left up to 500,000 tons unharvested as wineries reduced their purchases. California grape growers cited lack of demand for grapes and the high cost of labor as their leading worries.
California had 575,000 bearing acres of wine grapes in 2025 plus 40,000 non-bearing acres. Most analysts think that bearing wine grape acreage must decrease to 500,000 to bring wine supply in line with demand. The fastest rising demand is for Prosecco, white blends and varietals like sauvignon blanc and pinot grigio, all affordable and often lower-alcohol wines, says Migration News.
The sales downturn has cut new job hiring in the wine industry in May 2025 by 30%, says one index.
The Paso Robles wine association, Paso Robles Wine Country, is working hard to make the best of it, announcing for a second year, targeted wine tasting events in Bakersfield and in Clovis in September featuring 40 wineries that will be offering a taste of the Paso Robles brand.
Columnist John Lindt covers agriculture and business.
Dining and Cooking