UK: Constellation Brands to “clean up” in '09
Constellation Brands is set to target "cleaning up" its portfolio going forward.
The company, which has developed an acquisitive reputation over recent years, has already this year sold off its "value" spirits portfolio, which includes Barton, the 99 schnapps line, the di Amore line and Montezuma Tequila, to Sazerac Company for US$334m.
Speaking to just-drinks last week, Troy Christensen, president of Constellation's European business, said: "The company had historically focussed on growth - more through acquisition than divestment - and I think it's normal that, when a company reaches a certain size, it looks to clean up a little bit and to focus on what's important.
"If we can divest and create some value, then we can turn our attention to what we think will be our core business in the next three to five years. The spirits side was a cash cow, but it took a lot of time and attention and had a lot of risk associated with it."
Christensen did not rule acquisitions out totally for Constellation, however. "I think if the right acquisition comes through, then we'll certainly look at it. In the meantime, you have to look at everything that's going on out there and see what you should really be focussing on - you don't want to spread yourself too thin."
When asked if Constellation would be interested in any of Fosters Group's wine brands, should the Australian company look to sell any, Christensen said: "With people nervous about debt, there's an understanding that you have to demonstrate that you can pay down your debt quite effectively. That's what we find is more important now.
"I do think there will be additional consolidation in the market place in the next two years - there has to be. But right now, Constellation will really be focused on paying down debt."
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