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Ste. Michelle Wine Estates brand files for bankruptcy
Two Vines, owned by US giant Ste Michelle, has filed for Chapter 11 bankruptcy as it struggles under the weight of a US$90,000 tax bill, among other debts.
Two Vines Vineyards Inc. filed for Chapter 11 bankruptcy protection on 24 August in the US Bankruptcy Court for the District of Arizona, with the paperwork revealing the wine company has up to 49 creditors.
Among its more significant debts is US$90,000 owed to the Arizona Department of Revenue, though most of the wine company’s other debts are below US$10,000.
The company has not released a statement about the bankruptcy filing, nor has it submitted any refinancing plans to the court. However, the petition revealed that funds would be available for Unsecured Creditors.
The Two Vines website appears to have been disabled, and social media activity halted.
In 2013, Ste. Michelle revealed plans to separate Two Vines from Washington winery Columbia Crest and relaunch the brand as a standalone winery. Its first vintage as the formerly named Columbia Crest Two Vines had been in 2004.
Going it alone, Two Vines was positioned to compete at the lower end of the premium market with bottles retailing at around US$8 and grapes bought from both California and Washington.
“Washington is the heart and soul of our operation,” Leitch said. “We’re looking to California as a shorter-term way to fuel demand for Two Vines,” said Kari Leitch, vice president of communications for Ste. Michelle Wine Estates, at the time.
Leitch further revealed that using California grapes for Two Vines would “free up Washington fruit for the higher-priced tiers”.
Ste. Michelle Wine Estates espouses Two Vines’ use of vine trellising “which positions grape clusters for optimum sun exposure, resulting in approachable wines with richer flavour, brighter colour and an expression of fruit that’s perfect for everyday enjoyment,” the group says on its website.
The drinks business has been unable to find a connection between Two Vines and Arizona that would explain why the bankruptcy petition was filed in the US state.
Not immune
The largest winery in the Pacific Northwest, Ste. Michelle now oversees more than 12,000 hectares of vineyards across Washington, California and Oregon. Among its brand portfolio are 14 Hands, Columbia Crest, Erath, and Borne of Fire with one of its latest acquisitions being Oregon’s top-selling wine brand A-Z, which Ste. Michelle bought in 2022 in a move that brought the A-Z and Rex Hill labels under its wing.
Despite the wine group’s size and considerable clout, Ste. Michelle has been no stranger to the financial issues impacting the rest of the wine trade.
In August 2023, db reported that Ste. Michelle had made the decision to cut its grape grower contracts by 40% in order to “ensure the health of our business.”
“Our long-term relationships with our growers are extremely important to us, and while this is a difficult process, these proactive measures are necessary for the ongoing health of our business as well as the health of the overall Washington wine industry,” said Lynda Eller, senior director of communications, at the time.
The group then swiftly announced it was ceasing production for 14 Hands at its long-term Prosser winery site.
“This harvest our 14 Hands winemaking teams will be producing 14 Hands wines at our heritage Columbia Crest winery … as we look to make the best use of our winemaking facilities,” Eller said.
With fewer grapes to process the move ensured that only one winery site was used for production rather than two, cutting back on the costs of running the facilities.
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