Constellation Brands plans to put up to 30 of its low-end brands for sale

Date: 4th April 2019

The Corona beer maker is aiming to rationalise its business and put more effort into the profit-making divisions of its firm. As a move towards that, the firm is selling 30 of its wine and spirits brands to E & J Gallo Winery. The sale brings the firm $1.7 billion of proceeds, the firm said on Wednesday.

This sale has been in the mind of the firm’s management since February. It now aims to focus on high-end product ranges of beer and cannabis to capture young customers.

The deal is expected to be completed by the end of Q1 of 2020. It majorly includes low-end brands of the company, like Clos du Bois, Ravenswood and Mark West. The brands that are still with Constellation include Kim Crawford, Meiomi and Robert Mondavi.

The brands to be sold majorly include those which have a price per bottle lower than or equal to $11. This shows the company’s apparent aim to target high-income customers and earn higher profit margins from more expensive brands.

The brewer is to publish its quarterly financials on Thursday. The company sold its Canadian wine business to Ontario Teachers’ Pension Plan back in 2016. This sale was worth C$1.03 billion or USD 772 million.