Washington wine giant Ste. Michelle sold for $1.2 billion
SEATTLE (AP) — Ste. Michelle Wine Estates has been sold for about $1.2 billion to a private equity firm by its parent, the tobacco company Altria.
Woodinville-based Ste. Michelle describes itself as the nation’s third largest wine company, farming nearly 30,000 acres across Washington, Oregon, and California and selling wines under labels including Chateau Ste. Michelle, 14 Hands, Columbia Crest, Erath, Intrinsic and Patz & Hall.
The Seattle Times reports its growth has stalled, however, in the highly competitive wine industry. Ste. Michelle’s sales slipped from $691 million in 2018 to $689 million in 2019, with operating income turning from a $50 million profit to a $3 million loss. Then, during the pandemic shutdowns of 2020, Ste. Michelle’s sales fell to $614 million and it reported a steep operating loss of $360 million.
Altria, which owns major cigarette brands such as Marlboro, said it will use the sale’s proceeds to buy back stock. CEO Billy Gifford said shedding the wine company is part of its plan to focus on “moving adult smokers away from cigarettes by taking action to transition millions to potentially less harmful choices” like noncombustible nicotine products.