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As Washington wine has grown into big business, many have asked when the California big boys would come knocking. The answer is now.

On Monday Modesto-based E. & J. Gallo announced the purchase of two long-tenured Washington wineries – Columbia Winery and Covey Run. The sale of the wineries by Ascentia Wine Estates has been anticipated for some time.

E. & J. Gallo is a name many consumers are familiar with. The winery was founded in 1933 by Ernest and Julio Gallo. The company is the largest privately owned winery in the country.

How big is Gallo? The company employs 5,000 people worldwide and has 60 different brands. Fourteen of these brands are imported from other countries ranging from New Zealand to France. Gallo owns eight wineries and 16,000 acres of vineyards in California alone. For perspective, that would be more than one third the total acreage in Washington, though it is just a speck in California.

Gallo is best known for its value brands, such as Andre sparkling wine, Boone’s Farm, Carlo Rossi, Barefoot, and Bartyles & James. The company also includes brandy, gin, and other spirits in its portfolio.

What will this mean for these two wineries and for Washington in the long term? Only time will tell but look for production at both wineries to ramp up in the coming years. Gallo is a big company and can put as much time and money into these wineries as it desires. Bottom line: there is another large player in town. Expect others to follow in the coming years.

Wine Industry Insight reported last Thursday on an email sent to Columbia Winery and Covey Run employees that Gallo officials would be visiting the wineries. Initial reports are that many of Covey Run’s staff were subsequently dismissed. No word yet on changes at Columbia Winery, and E. & J. Gallo officials have not responded to a request for comment.

Covey Run was founded in 1982. Columbia Winery, then Associated Vintners, was founded in 1962. Both wineries were purchased by Ascentia Wine Estates in 2008. However, the company struggled almost from the beginning and recently began being dismantled.

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7 comments

  1. Shona Milne Says:
  2. Only 5 out of 19 left at Covey Run; maintenance and cellar workers. Quite a few, including myself, are no longer at Columbia. Most of tasting room staff to be outsourced to Kelly Services.

     
  3. Today's press release for your enjoyment:


    E. & J. Gallo Winery Announces Purchase of
    Columbia Winery and Covey Run Wine Brands
    Company Expands to Meet Growing Demand

    MODESTO, Calif. (June 4, 2012) -- – E. & J. Gallo Winery (Gallo) announced today the purchase of Washington’s Columbia Winery and Covey Run Wine brands from Ascentia Wine Estates. Gallo has purchased the two wine brands and taken over the operation of the Woodinville and Sunnyside facilities. The purchase marks Gallo’s first expansion into the state. No price was given.

    According to Roger Nabedian, Senior Vice President and General Manager of Gallo’s Premium Wine Division, “We have been watching the Washington wine industry grow for a number of years and consider these wine brands to be a key part of our premium wine strategy moving forward. This purchase will help us expand our footprint and offer our customers wines from the Columbia Valley and Yakima Valley Appellations.”

    Washington is America’s second largest wine-producing state, after California, with 650 wineries and more than 36,000 acres of vineyards. It produces a wide variety of premium wines from more than 30 leading varietal types and is comprised of 11 distinct winegrowing regions.

    Demeter Group, a San Francisco-based investment bank for consumer retail companies, acted as Ascentia’s exclusive financial advisor.

    -end-

    About E.&J. Gallo Winery
    Established in 1933 in Modesto, California, by Ernest and Julio Gallo, E. & J. Gallo Winery has become the world's largest winery and the foremost winery in the art of grape growing, winemaking, distribution and marketing of wines. With seven wineries strategically located in California’s wine regions and access to grapes from vineyards in all of the premier grape-growing areas of the state, Gallo produces wines in every category, to suit every taste. Gallo imports wines from eight of the major wine growing countries in the world. Some of the brands in Gallo’s wine portfolio include Gallo Family Vineyards, Barefoot Cellars, Louis M. Martini, MacMurray Ranch, Bridlewood, Mirassou Vineyards, Frei Brothers, DaVinci, Martin Codax, Don Miguel Gascon, Ecco Domani, McWilliam’s Hanwood Estate, and William Hill Estate. Recently, the Winery has expanded its portfolio to include distilled spirits with the introduction of New Amsterdam Gin and Familia Camarena Tequila.

     
  4. Demeter Group... Financing companies with cash fermented in cow horns and payment terms synchronized with lunar cycles.

     
  5. "Began being dismantled" is a euphemism for "out of business." Ascentia has been inactive for the past year. My take: Gallo waited to pounce until Ascentia's last dying breath.

     
  6. Anonymous Says:
  7. @Shona

    Sorry to hear. I always found the Columbia tasting room to be an inviting and relaxing place to grab a glass of wine and maybe some pizza after work. I hope everyone involved does well.

    Kelly Services - I had no idea they had Washington wine experts in their roster. I'll have to stop in ask their opinion on some of the different vineyards in our state, I'd be interested to hear their take...

     
  8. Anonymous Says:
  9. My favorite low priced chardonay has always been the Columbia Crest Grand Estates. Some years it was rated in the 90's beating $30 bottles of California chardonnays. Now that Gallo has taken over I expect they will turn Columbia Crest into rot gut.

     
  10. Anon 6/6, fear not. It was Columbia Winery that was sold, not Columbia Crest. Your Chardonnay is safe!

     

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