Constellation released its full-year results yesterday

Constellation released its full-year results yesterday

The head of Constellation Brands has said the company is paying a “premium” to speed up a capacity upgrade on its Mexican brewery.

In a call with analysts yesterday (9 April), the group's CEO Rob Sands said building work is now on a “compressed timetable” so it can make the most of strong growth for its beer unit. Sands was speaking after the release of full-year results, which showed a 10% jump year-on-year for his company's beer sales. The gorup's wine and spirits sales rose 2% in the year. 

Constellation said yesterday it will increase investment in its Mexican Piedras Negras brewery to between US$900m and $1.1bn compared to an initial estimate of between $500m to $600m. Sands said the upgrade was always intended to double “theoretical” capacity to 20m hectolitres a year but that the extra investment will allow Constellation to make production more efficient. “We are expanding the brewery in a manner to get more cases out of that than we originally planned,” he said.

Meanwhile, Sands praised Constellation's booming beer business, enlarged after the company acquired full control of its Crown Imports JV with Grupo Modelo last year.

According to Constellation's full-year financial statement, net wine sales in fiscal 2014 were $2.6bn and net spirits sales $291m. Net beer sales were $2.8bn over the same period.

Sands also said a wine partnership with Chinese distributor Vats Liquor, announced last month, is a long-term project and will not have have “any real impact from a financial perspective” in the short-term.