USA: Constellation Brands reports 12% decline in beer sales in Q3

Constellation Brands Inc. said on January, 5 that its third-quarter profit slumped 25 percent on weaker wine and beer sales in North America, Bloomberg Business Week reports.

The world's No. 2 winemaker by volume reported net income of $104.8 million, or 52 cents per share, in the September-to-November quarter. That's down from $139.3 million, or 65 cents per share, a year earlier.

Its revenue dropped 27 percent to $700.7 million from $966.4 million largely because it sold the bulk of its Australian and British wine business last January.

Its wine and spirits sales in North America fell 4 percent, and beer sales dropped 12 percent. The drop in volume was driven largely by a year-over-year shift in inventory created by a distributor network consolidation it launched in September 2009.

Through its Crown Imports wholesale business joint venture with Mexican brewer Grupo Modelo SA, it also imports moderately priced beers such as Corona Extra, Tsingtao and St. Pauli Girl.

Based in Victor, N.Y., Constellation said it remains on track to meet its full-year profit goal. In October, it raised its full-year guidance by 10 cents to a range of $1.92 to $2.02 per share.

Last January, Constellation lost its eight-year status as the world's No. 1 winemaker when it offloaded 80 percent of a once-promising Australian wine business that had gone awry.

It dropped back to No. 2 in the vintner-by-volume rankings behind longtime leader E. & J. Gallo of Modesto, Calif. But it remains the world's biggest premium-category winemaker with an estimated 17 percent share of that segment in the United States, ahead of rivals that include Gallo, Treasury Wine Estates, Kendall-Jackson and Diageo.

11 January, 2012