It is common knowledge that the Australian wine industry has enjoyed remarkable success over the past three decades in terms of production and export growth, innovation and reputation for consistent quality. The centralization of resources and infrastructure, as well as the nationally-oriented funding and R&D agendas are usually cited as providing the foundation for this success. Yet in more recent years it is this same nationally-focused centralization that is increasingly at odds with a rapidly changing international wine landscape and therefore, the organizational and innovation requirements of the firms that must respond to these changes. This paper explores these issues within the theoretical context of what it has termed domain inertia – an industry-level dislocation between oganization and firm imperatives. Arguing that neither traditional organizational or innovation-based change theories deal with the complexities of industry-level inertia the paper attempts to move beyond orthodox theoretical parameters. In so doing, it adopts a somewhat unique theory that places organizational and innovation inertia within a widening domain of discordant industry-level imperatives.