A spokesman for Brown-Forman Corp. declined to comment on a report today in the Wall Street Journal that the Kentucky-based alcoholic beverage giant is selling all or part of its wine holdings, which include Hopland-based Fetzer and Bonterra, Sonoma-Cutrer near Windsor and five other brands. Citing sources who know about plan, the publication said Brown-Forman hired Rothschild to sell the assets at auction, with an expected take of a couple hundred million dollars.
The wine business has been a challenging play for beverage businesses with lower costs of goods sold, according to Sean Maher, a St. Helena-based wine mergers and acquisitions expert involved with a number of significant deals this year, including Diageo’s $269 million sale-leaseback of North Coast vineyards and winery facilities. “Spirits people always have struggled with wine assets, because it takes so much to get $1 in sales,” he said.
Brown-Forman started its wine group in 1991 after the acquisition of Jekel in Monterey County. A year later the company acquired Fetzer Vineyards and Sonoma-Cutrer Vineyards in 1999-2000. Today the company has eight wine brands.
At the end of its fiscal quarter in April, Brown-Forman reported that depletions for the Fetzer Vineyards brand decreased 5 percent from fiscal 2009 to 2.16 million cases. Meanwhile, depletions of super-premium price tier Sonoma-Cutrer Vineyards and certified-organic Bonterra Vineyards were among super-premium-price wine and spirits brands increased 2 percent.
Other drinks companies are divesting of some wine assets. Australia-based Foster’s Group has been seeking to “demerge” its wine group, now called Treasury Wine Estates. The Wall Street Journal also reported that Constellation Brands is courting a buyer for brands outside the U.S.
Brown-Forman has a longstanding sales and marketing agreement with Korbel Champagne Cellars of Russian River Valley. Any move to sell wine operations is not expected to affect that relationship, according to a Korbel spokeswoman.
0 comments:
Post a Comment