Constellation and Grupo Modelo end their dispute

Earlier in October Constellation Brands said its fiscal second-quarter profits for the three months ended 31 August 2010 fell to USD 91.3 million from USD 99.7 million in the same quarter last year.

Constellation Brands’ equity earnings from its 50 percent interest in the Crown Imports joint venture totalled USD 65 million, a decrease of 10 percent from the prior year second quarter.

Second-quarter revenue fell 2 percent to USD 863 million.

Constellation Brands, whose best-known wine brand is the moderately priced Robert Mondavi, reported better-than-anticipated demand in its critical North American market. The company said that customers are actually drowning their sorrows in a sluggish economy by “trading up” in the words of Chief Financial Officer Bob Ryder, which in turn helped boost profit margins.

However, CEO Robert Sands did allude to an “uncertain consumer and competitive environment,” so the situation could eventually turn from cheers to tears.

Fortunately, Constellation Brands and Grupo Modelo could settle their quarrels or Constellation Brands would have been in real troubles if the joint venture had fallen apart ahead of time.