The story appears on

Page A13

December 22, 2010

GET this page in PDF

Free for subscribers

View shopping cart

Related News

Home » Business » Consumer

Liquor makers seek to sell wine business

THERE may be two more wine businesses up for sale as some parts of the industry struggle with weak sales volumes and pricing.

Brown-Forman Corp, the maker of Jack Daniel's whiskey, is putting its wine business on the block, The Wall Street Journal reported online late Monday, citing unnamed sources. The company, based in Louisville, Kentucky, has reportedly hired Rothschild to run the auction process after its wine business - which includes brands such as Fetzer and Bonterra Vineyard - delivered sluggish sales for several years.

The deal could fetch a few hundred million dollars, according to the report. Brown-Forman and Rothschild declined to comment.

The paper also said that people familiar with the matter expect Constellation Brands Inc to sell the bulk of its non-United States wine business to an unknown buyer as soon as this week. That deal is reportedly valued between US$300 million and US$400 million. Constellation Brands, based in Victor, New York, did not return calls seeking comment.

Brown-Forman has focused more on its spirits business, which includes Jack Daniel's, Southern Comfort and Finlandia. Its wine business made up just less than 10 percent of its total US$3.2 billion in revenue in its last fiscal year. The company already sold its Italian wine brands business, Bolla and Fontana Candida, in late 2008.

While the buyers are unknown, analysts speculate that private equity firms will be eying the offerings from both companies.

Constellation is focused primarily on wine - drawing more than 90 percent of its revenue from moderately priced wines such as Clos du Bois and Blackstone. The company also sells liquors such as Svedka vodka and Black Velvet Canadian whiskey and some imported beers through a wholesale joint venture.

The company bought Australian vintner BRL Hardy Ltd in a 2003 deal that made it the world's largest wine business. It jumped further ahead of longtime wine leader E.& J. Gallo Winery of Modesto, California, when it bought Robert Mondavi Corp for US$1.3 billion. But it is facing tough times abroad.





 

Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.

沪公网安备 31010602000204号

Email this to your friend