#1 wine company dumps well-known low-end brands
Constellation Brands, the #1 wine company in the world, announced it would sell three well-known low-end US wine brands to US-based Wine Group. The deal involves the brands Almaden, Inglenook, and Paul Masson. The deal is for $134 million.
The move appears to be part of a move by Constellation to higher-margin premium wines. The company bought the high-end wine business of Fortune Brands last month (for $895 million). Those wines sell for $8 and more, while Inglenook and Almaden wines sell for around $3 a bottle.
The Wine Group is the #3 U.S. wine company, behind Constellation Brands and Gallo. It is best known for its boxed wine brand Franzia, as well as the kosher Mogen David line.
Not a big deal in monetary terms, but illustrative of the gin rummy principle. Constellation, having picked up some aces and kings in the Fortune Deal, now wants to discard the deuces and treys in its hand. The Wine Group, which alreday has some dueces, sees an opportunity to make a trick.
8:37:00 PM 
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