The write-off reflects the growing chasm between what Orlando paid for contracted grapes and the future value of the wine that will be processed for coming vintages.

Orlando, which has a portfolio of best-selling labels including market heavyweight Jacob's Creek, as well as Wyndham Estate, Poet's Corner and Richmond Grove, has also made a $29 million provision for restructuring as it tweaks its operation to cope with the downturn.

Parent company Pernod Ricard Pacific posted a net profit of $26.9 million for 2007-08, a 27.5 per cent dive from the previous year's profit of $37 million. Revenue rose to $676.6 million from $657.2 million.

Pernod Ricard Pacific also owns a suite of spirits including Absolut Vodka, Wild Turkey, Kahlua, Malibu and Chivas Regal.

Orlando managing director Stephen Couche said the wine glut and the global financial crisis had created the most difficult conditions for the wine industry he had experienced.

Mr Couche, who is also a director of Pernod Ricard Pacific, said the British market was particularly tough, with poor trading conditions compounded by the fact more than 70 per cent of wine was sold through only five grocer groups.

He said ''extreme retail consolidation'' in Britain had handed retailers power to charge hefty sums for including its wines in marketing publications and store promotions.

''It's not difficult to sell wine but it is to make profit, and we have taken the decision to walk away and lose market share on promotional activity [in Britain] because it is just unprofitable,'' he said.

Last month Foster's warned that the strong Australian dollar and the competitive landscape would cut earnings at its troubled wine division by as much as $90 million in the first half.