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Originally published June 4, 2012 at 6:27 PM | Page modified June 5, 2012 at 10:53 AM

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Gallo buys into Washington wine industry as Ascentia retreats

E. & J. Gallo Winery, the California-based wine giant, on Monday confirmed its rumored purchase of Woodinville-based Columbia Winery and sister brand Covey Run.

Seattle Times business reporter

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Welcome to Washington, Ernest and Julio.

E. & J. Gallo Winery, the California-based wine giant, on Monday confirmed its rumored purchase of Woodinville-based Columbia Winery and sister brand Covey Run.

The deal, whose terms were not disclosed, marks Gallo's first foray into Washington, the nation's second-biggest wine-producing state.

Columbia, which marks its 50th anniversary this year, is the 11th-largest producer among Washington's nearly 800 licensed wineries. With operations in Woodinville and Sunnyside, Yakima County, it produced 274,194 gallons last year, according to data from the Washington State Liquor Control Board.

Its offerings include syrah, merlot and cabernet sauvignon among red wines, and chardonnay, pinot gris and riesling among whites.

Roger Nabedian, senior vice president and general manager of Gallo's premium wine division, said in a statement that "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."

The sale to Gallo also marks the unraveling of an earlier, ambitious wine-industry deal after just four years.

In June 2008, a newly formed company called Ascentia Wine Estates bought Columbia, Covey Run, Idaho's Ste. Chapelle and five other wineries from Constellation Brands for nearly $209 million.

"The Northwest is a unique opportunity for me to expand our overall portfolio in order to have a greater regional focus," Ascentia CEO Jim DeBonis told Seattle Times wine writer Paul Gregutt at the time of the deal.

"I have a particular interest in the riesling category (and) that was a real driving force in looking at Covey Run, Columbia and Ste. Chapelle."

But the financial crisis that struck later that year, and the subsequent deep recession, hit the debt-laden company hard as wine sales fell, and last year it began selling off its wine brands.

Last month, Ascentia sold Ste. Chapelle to Seattle-based Precept Wine, whose other holdings include Waterbrook Winery and Canoe Ridge Winery of Walla Walla, and Benton County-based Willow Crest Estate Winery of Prosser and Alder Ridge Winery of Patterson.

Ascentia's five California wineries also have been sold.

Information from Seattle Times archives was used in this story.

Drew DeSilver: 206-464-3145 or ddesilver@seattletimes.com

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