The wine juggernaut
Wine seems like the unlikeliest of all industries to get concnetrated. After all, the world is dotted with excellent wineries, there are hundreds of grape varieties, and there are wines at every price level and taste from Mogen David to Chateau Lafitte.
But US-based Constellation Brands, already the world's biggest winemaker, just got considerably bigger this week thanks to the purchase of the wine assets of Fortune Brands. The deal, for $885 million, included such wines as Clos du Bois, said to be the #2 super-premium wine in the US, Geyser Peak, Buena Vista, and Wild Horse among other brands. Fortune Brands sells over 2.5 billion cases of wine a year.
The deal gives Constellation a 20% market share in US wine, though its global position is just 5%.
Constellation already sells such brands as Robert Mondavi, Woodbridge, Ravenswood, Almaden, Inglenook, and Simi. It also has smaller holdings in spirits and imports bee, including La Corona and Tsingtao. It has been growing steadily with over a dozen acquisitions in the last decade, some of a billion dollars or more.
It's a classic case of a conglomerate selling out to a focused monopoly that can push its specialized line of products more effectively. Fortune Brands, mostly aimed at the luxury market, also sells spirits, golf equipment and home products. In the spirits line it sells such names as Courvoisier (cognac), Sauza (tequila), DeKuyper (liqueurs), Canadian Club (whisky), Dalmore and Laphroaig (Scotch) and Jim Beam, Knob Creek, and Maker's Mark (bourbon). The company also sells such household hardware brands as Moen (faucets), MasterBrand (kitchen cabinets), ThermaTru (doors), Simonton (windows), and Master Lock (locks). Its golf equipment brands include Titleist (the #1 brand), Cobra, and Pinnacle. Apparently, the wine business had the lowest return of its business units.
8:13:38 PM 
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