Constellation and Pernod march on
wines across Europe after it helps sales soar in the US, and Pernod
Ricard finally has Allied Domecq in its sights, reports Chris
Mercer.
Constellation Brands is plotting the expansion of its newly acquired Robert Mondavi wines after the brand helped the firm increase profits by almost 50 per cent, and push sales over the $1bn barrier.
The firm, which recently abandoned plans to launch a counter-bid for Allied Domecq, said Mondavi and Ruffino had driven a 36 per cent increase in branded wine sales to $495.4m.
Accordingly, Constellation's branded wine sales soared by 54 per cent in Modavi's stronghold, the US. And now the firm plans to expand the brand's reach to mainland Europe after seeing promising growth there from its New World portfolio.
"With the integration of Robert Mondavi essentially complete, we are now focused on geographic expansion of brands in that portfolio to make them truly international," said Constellation chief executive Richard Sands.
"We know there is substantial growth potential for Robert Mondavi throughout Europe, and in other key markets around the world, which will be supported through the strength of our distribution capabilities, as well as our knowledge of markets. We're also leveraging those same capabilities for Ruffino in the United States."
Robert Mondavi Woodbridge, a California table wine, has been embraced by multiple retailers after being unveiled in the UK recently. Constellation also had the wine on display at the recent VinExpo conference in France, complete with a new label design.
Alongside the wine, Constellation's beer and spirits business also performed solidly with a nine per cent increase to $346m. Sands said the company's branding strategy had helped the business to grow, despite tough competition on the US beer market.
Pernod closes in on Allied
The wedding of the year is almost complete. Allied Domecq shareholders said 'I do' yesterday afternoon meaning the global spirits market is almost certain to be neatly sown up by two superpowers.
Allied Domecq shareholders voted to accept a £7.4bn takeover bid from France's Pernod Ricard. Pernod's shareholders gave their blessing last Thursday.
If the deal now goes ahead, Pernod will not only become the world's biggest wine and spirits firm, but also the new superpower in the spirits world behind UK-based Diageo.
These two would have a combined spirits retail value of more than $20bn and a virtually unassailable lead over any other spirits maker, although Diageo would remain well in the lead for now.
In the last week, Pernod has near-enough got clearance from competition authorities in both the US and European Union for its takeover bid, after agreeing to sell off extra whiskey brands and supply deals in addition to those already set to go to US-based Fortune Brands.
The proposed takeover must still get passed authorities in Canada and the US Federal Trade Commission is still examining the deal in relation to Canadian Club and Maker's Mark brands.
