Constellation Brands will cut jobs to save profits

The world’s number one wine company Constellation Brands and maker of Robert Mondavi Wines and Svedka vodka said on 30 June 2011 that it plans to cut about 100 jobs, or 2.3 percent of its workforce, as part of a business realignment meant to save money, following the sale of its Australian and U.K. wine businesses.

The company expects the redundancies to save it more than USD 10 million, with most of the savings realised in fiscal 2013.

In the first quarter of fiscal 2012, which ended 31 May 2011, Constellation had net earnings of USD 74.5 million, up from USD 49.1 million a year earlier.

Most of Constellation’s profits came from its joint venture with Mexico’s brewer Grupo Modelo, which rose 10 percent to USD 60 million. Sales of the venture, which imports beers like Corona into the United States, rose 9 percent.

Constellation’s net sales fell 19 percent to USD 635.3 million in the first quarter, hurt by divestitures.

In North America, net sales rose 2 percent, helped by fewer promotions and selling a greater proportion of more expensive wines. But volume fell due to price increases on certain wines.