Oyster Bay Marlborough Vineyards is forecasting lower prices will result in a full year loss, which may cause it to breach limits agreed with its banks.
The grape company made a profit of $1.5 million in the year to June. The company sells all its harvest to majority owner Delegats.
While talks with the wine producer are not completed, Oyster Bay says an oversupply of grapes means prices have slumped.
Sauvignon prices have fallen to $550 per tonne.
Oyster Bay says it's seeking a waiver from its bank for a potential breach of its banking covenants.
Its shares fell to a year low of $2 each on Wednesday.