By Ian Neubauer
A healthy jump in the first quarter earnings of US-based Constellation Brands — the largest winemaker in the world — has been underscored by a three per cent drop in branded wine sales for its Australian operations.
Constellation attributed the slump on price increases “that have impacted volume growth but have enhanced overall margins and profitability”.
Constellation Brands CEO, Rob Sands, overlooked the company’s Australasian downturn in a statement accompanying its first quarter earning report for 2008. The report showed the company posted a 50 per cent jump in earnings compared to the same period last year and a three per cent rise in wine sales worldwide.
“Our results represent a solid start for the year and we are on track to achieve our fiscal 2009 strategic business objectives," he said. “Efforts throughout fiscal 2008 set the stage for fiscal 2009, and milestones, such as the recently announced sale of certain US wine assets, underscore our focus on reducing borrowings, streamlining our portfolio and improving operational efficiency while enhancing our financial performance.”
Constellation has more has more than 250 brands under its belt marketed in 150 countries. Its Australian portfolio includes Banrock Station, Barossa Valley Estate, Berri, Chateau Reynella and Hardy’s.
Constellation shares have lost more than 30 per cent of their value on the Australian Stock Exchange this year, down from $2.79 in January to $2.16 on Friday.