California's oldest family-owned winery declares bankruptcy as wine industry struggles

California's oldest family-run winery has filed for bankruptcy protection, another sign of the struggles in the wine industry.

The family behind Gundlach Bundschu, founded in Sonoma County in 1858, said it couldn't reach an agreement with lenders to restructure its debt, so it filed for Chapter 11 bankruptcy protection to buy breathing room as it tries to rebuild.

The winery's debt hangover followed its purchase of another estate during better times. In February 2020, it acquired a 60-acre estate as its business grew rapidly and it needed more space.

A month later, the COVID-19 pandemic hit. The wine industry in California hasn't recovered since.

The winery will change ownership for the first time after six generations.

Jeff Bundschu, a member of the founding family and president of the winery, told The Times that the family is looking for a new owner but plans to remain part of the business. He said the people behind the winery will continue to build the brand.

"When you become the kind of institution that Gundlach Bundschu has become in our community, it's as much about all the people that are involved, and everybody who works there sort of has a spirit of caretaking," Bundschu said. "It's almost more important than who owns it."

Over the last century and a half, the winery has won several awards for its wines. In that time, Gundlach Bundschu has survived a major pest outbreak, the San Francisco earthquake and fire, which destroyed one million gallons of wine and Prohibition.

In 2017, wildfires burned down the Bundschu family home, but they saved the winery.

Gundlach Bundschu's announcement follows several other California wineries that have cited difficulties as the industry struggles with dwindling demand, the trade war and natural disasters.

Wine behemoth Gallo earlier this year shared plans to lay off more than 90 employees by the end of January 2027 and close a major Napa Valley wine-making facility.

In February, Constellation Brands announced plans to lay off 212 workers at its Mission Bell Winery in Madera. The publicly traded company, which owns Robert Mondavi wines and Modelo and Corona beers, has set a goal of $200 million in cost savings by 2028 and is shifting away from wine to focus more on its growing beer business.