Blog: Who'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.
Whisk(e)y companies spend a lot of money and effort ageing their products for that premium taste....
PepsiCo created a stir last week with the news it is testing a product called Caleb's Kola, with some in the media claiming it was the beginning of a new “craft soda” category....
SABMiller's bid to widen the appeal of beer is very much in evidence at its latest 'House of Peroni' - with beer cocktails and a bigger bottle for the Italian lager brand on offer. ...
Here's a round-up of the big stories on just-drinks last week, featuring PepsiCo, SABMiller, the Scotch whisky category and the US wine market....
- Analysis - Remy's Cognac "dead-cat bounce"
- Comment - How Hand-Made is Tito's Handmade Vodka?
- Heineken to stay "active player" in beer M&A - CFO
- Focus - Pernod Ricard's Q1 sales by brand
- Diageo's future brighter than present suggests
- Moët Hennessy unveils first Travel Retail outlet
- United Spirits sees Q1 net loss
- Beam Suntory, Edrington part ways in Travel Retail
- Smirnoff Ice gets India launch
- Pernod Ricard sees sales lift in Q1