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04 December 2009

Constellation Brands expects consumers to show off with premium wine over the holidays

Since October 2009, the company has seen sales of premium wines grow at a faster rate than cheaper "value" products, Chief Commercial Officer Jay Wright was reported as saying in November 2009.

Still, given a high unemployment rate, Mr Wright and Chief Executive Rob Sands are staying cautious in their expectations for sales at the end of the year.

For years, Constellation Brands, which has revenues of USD 3.7 billion, has grown by putting emphasis on acquisitions. But more recently the focus has shifted away from buying new businesses to boosting growth in existing ones.

This has not stopped Mr Sands from publically announcing in November 2009 that he would look at Altria Group’s wine business if it ever came up for sale.

Altria, the maker of Marlboro cigarettes, acquired the premium wine business Ste. Michelle Wine Estates, when it bought smokeless tobacco company UST in September 2008.

Analysts expected an immediate divestment of Ste Michelle, which might have netted Atria up to USD 800 million.

But, surprise, surprise, Altria (revenues: USD 16 billion) to date has not put Ste Michelle up for sale.

Perhaps the boisterous Mr Sands hopes to speed things up by making a pass at Altria.

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