Blog: Olly WehringConstellation - are the times a-changin'?

Olly Wehring | 11 August 2008

In June, some of you may remember, we ran an interview with Bruce Jack from Constellation. Jack has been brought on board at Constellation to oversee its South African offering, in particular its flagship Kumala wine brand.

A couple of weeks later, I received a letter from Constellation Europe's president, Troy Christensen. In the letter, Christensen – who we interviewed last year – took me to task on my assertion, when speaking to Jack, that Constellation “doesn't have a reputation for focusing on improving value”.

“I welcome the question and congratulate you for holding the trade accountable for its behaviour,” Christensen said. “I would agree that Constellation does not have a great history in this regard,” he conceded, “but we have changed our strategy.”

Any suspicion I had that this could be a hollow statement was cast asunder last week, when Constellation announced the results of a review of its Australian operations. The company will now look to sell certain assets at Constellation Wines Australia and will implement changes to its wine portfolio and production footprint in the country.

Here is a company who, previously, had a reputation for being quicker than most when it came to getting out the chequebook when it came to acquisitions. The announcement last week signifies a clear change in strategy at Constellation. Is this a sign of troubled times and the wine giant? Or a reflection on the times we are all suffering in?

It's certainly not the former, as our interview with Constellation's CEO, Rob Sands, earlier this year can attest to.

Whatever the move suggests, one thing would appear certain. If Foster's is looking for a buyer for its beleaguered Australian wine operations – which many believe to be the case - then the company that many would have pegged as the first to go sniffing round will be staying at home.


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