Blog: Olly WehringWho's on Constellation's shopping list?

Olly Wehring | 13 November 2006

After a few days out of the office, comments last week from the chief executive of Constellation Brands have caught my eye. Richard Sands has said that the company wants to expand in Europe. Sands also said that the beverage industry on the continent was “a pretty target-rich environment”.

That phrase was notable in itself with many in the industry believing that significant acquisition targets were now scarce following Pernod Ricard’s takeover of Allied Domecq last year.

However, an obvious target for Constellation would be Sweden’s V&S Group, the owner of Absolut vodka. The recently-elected Swedish government looks set to sell off a slew of state-owned assets, and that could include V&S.

Constellation could be one to watch in what would be a fiercely competitive auction. In August, it announced that a share offering had raised US$700m, suggesting it has the financial firepower to bid for V&S, while it is keen to bolster its stable of premium spirits - and Absolut would prove a top drawer addition to that portfolio.

Speculation has also surrounded the future of French spirits and Champagne group Rémy Cointreau in recent months. Brown-Forman has been linked with a bid and Constellation is likely to be interested should Rémy’s controlling shareholders decide to sell.

A company like the UK-based Blavod Extreme Spirits could also interest Constellation. Blavod, producer of the eponymous black vodka, has seen sales of its spirits portfolio soar in the US.

Blavod has also entered the fast-growing Tequila category in the US and its El Diamante del Cielo would bolster a Constellation portfolio that so far already includes Montezuma Tequila. Blavod also distributes a raft of wines from Italy in the US, where consumer demand for Italian labels is growing.

Constellation’s shopping list in Europe, then, could be quite long. Who’s at the top of the list, however, could keep us guessing for a short while longer.


SABMiller's last word

Today is SABMiller's final day. Some time this evening, Brussel's time, the second-biggest brewer in the world will be subsumed into the biggest, creating a beer behemoth of unprecedented proportions....


"Buy a Mountain Dew and enjoy it"

No, this is not PepsiCo's new ad slogan for its Mountain Dew brand....


Did Alibaba's 9.9 Global Wine and Spirits Festival flop?

Major wine players flocked to China ready for online giant Alibaba's 9.9 Global Wine and Spirits Festival, which took place on 9 September....


Is Vietnam about to curb late-night drinking?

In May, Heineken's CEO, Jean-François van Boxmeer, called Vietnam the "poster child" for international beer thanks to strong demographics and growing demand....

just-drinks homepage

Forgot your password?