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US: US wine sales, beer imports buoy Constellation

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Rising wine sales in the US and a strong performance from its beer stable has driven a 12% increase in third-quarter net income for Constellation Brands.

For the three-month period to 30 November, the US drinks giant today (5 January) reported net income of US$109m on the back of a 17% rise in net sales to US$1.3bn. The company saw branded wine sales in the US leap 50% largely due to the recent acquisition of Robert Mondavi and the purchase of a 40% stake in Italian fine wine producer Ruffino. Excluding acquisitions, branded wine sales were up 7%.

Constellation had seen sales in the UK suffer in recent months but chairman and CEO Richard Sands said he was "gratified" with the company's performance both there and in mainland Europe.

He added: "Constellation leveraged its leadership position and relationships with UK retailers to gain key placement, promotion and advertising of our brands as we headed into the always important holiday season."

Branded wine net sales in Europe were hit by the weak dollar but on a constant currency basis were up 10%. Sales in Australasia were also up, rising 7% despite challenging industry conditions in Australia.

Constellation saw imported beer sales in the US rise 16% during the quarter, driven by a Mexican beer portfolio including Corona and Modelo Especial. Sands said: "Our beer business continues to benefit from category growth, market share gains driven by increasing consumer demand, in addition to expanded distribution for our portfolio."

Referring to Constellation's performance as a whole, Sands added: "The growth of our base business was solid in our third quarter of fiscal 2006."


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