UK: Constellation sells Strathmore to AG Barr
Constellation Brands is to sell its Strathmore bottled water business to UK soft drinks producer AG Barr for GBP15m (US$28.1m).
The US drinks giant gained Strathmore when it acquired Matthew Clark in 1998 but has decided the water brand is no longer a key part of its business in the UK.
"Strathmore is a non-core product for us in a category in which we do not generally compete, and we believe our resources can be better utilised in support of our UK beverage alcohol portfolio," said Richard Sands, Constellation Brands chairman and CEO today (22 May).
"The benefits of owning Strathmore, which largely relate to sales through our UK wholesale business, have been protected by an ongoing supply contract with AG Barr."
Strathmore's generated net sales and operating income of GBP12.6m and GBP1.3m respectively for the year to 28 February.
The brand joins an AG Barr stable including Irn-Bru and Findlays spring water. AG Barr chief executive Roger White said: "We are extremely proud to be bringing a brand with such a strong Scottish heritage into the fold of a successful Scottish company. Strathmore is an established brand from a trusted water source that is performing well in the category and with an excellent track record in new product development.
"We believe it has exceptional potential for further growth in today's market and we are very much looking forward to rolling out a dynamic investment programme for its development in the months and years ahead."
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