Constellation sells more wine brands to The Wine Group

Constellation Brands has offloaded much vino brands – and again US adjacent The Wine Group is the buyer.

In a woody announced yesterday (9 April), Constellation said it had sold six brands, including Woodbridge, Meiomi and Cook’s. The brands are “mostly positioned successful the declining mainstream segment”, the radical said. It added the woody is “expected to make circa $900m successful proceeds” successful its caller fiscal year.

The merchantability is Constellation’s latest determination to reshape its scope to pricier products.

Three years ago, the radical sold a clutch of vino brands including Cooper & Thief, 7 Moons and The Dreaming Tree brands to The Wine Group.

“This transaction reflects our multi-year strategy to reconfigure our business, resulting successful a portfolio of higher-end vino and trade spirits brands that are aligned to evolving user preferences and assistance bolster our competitory position,” Constellation president and CEO Bill Newlands said.

Nadine Sarwat, an expert covering Constellation for concern slope Bernstein, said investors should invited the disposal.

“A divestment of the vino business, oregon a information of it, has been desired by investors for a long-time, and this quality should beryllium taken positively,” she said.

The woody includes 3 facilities and 6,600 either leased oregon owned vineyards successful California.

In a statement, The Wine Group said the woody “will bring the institution respective popular, premium and ultra-premium brands, further on-premise volume, an expanded retail beingness [and] caller in-house operational capabilities”.

John Sutton, The Wine Group’s CEO, added: “The summation of these assets volition physique connected our committedness to being a consumer-led company, delivering a diversified portfolio that offers consumers exceptional taste, prime and worth – for immoderate occasion.”

Alongside the transaction, Constellation announced the fiscal results for its 2024/25 fiscal year, which closed astatine the extremity of February.

Reported nett income grew 2% to $10.21bn. Operating income fell 89% to $355m, contributing to a nett nonaccomplishment of $81m.

The Casa Noble Tequila proprietor recorded a scope of impairment and restructuring items successful its accounts.

Constellation provided “comparable” numbers, which translated to a 2% summation successful revenue, a 7% emergence successful operating income to $3.48bn and a 10% maturation successful nett income to $2.51bn.

The Modelo brewer besides provided its forecasts for the caller fiscal year.

In the 2025/26 fiscal period, Constellation is predicting its nett income volition beryllium successful a scope of 1% maturation to a 2% decline.

The radical sees nett income from its brew concern being level astatine champion up to 3% higher twelvemonth connected year.