Into red for wine company

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This was published 13 years ago

Into red for wine company

By Eli Greenblat

US-BASED Constellation Brands, which in 2003 bought Australia's largest wine business, Hardy Wine Company, has booked an operating loss of $US3 million ($A3.07 million) for its Australian and European wine operations as the higher Aussie dollar and tough conditions in Britain constrained sales.

The dip into the red during the second quarter was against a profit of more than $US4 million for its wine operations for the same period last year, but Constellation Brands believes the segment will be profitable on a full-year basis.

The company released its quarterly results overnight, posting a 2 per cent dip in net sales to $US863 million and a profit of $US91 million, down 8 per cent for the quarter.

Constellation, which owns a high-profile portfolio of beer, wine and spirits brands - including some iconic Australian wine brands - has moved to significantly reduce its costs in the wake of the global financial crisis and a general downturn in beverage sales.

Australian and European wine sales for the quarter dived 14 per cent to $US207 million. Total group wine sales of $US808 million were up 4 per cent, with North American wine sales up 5 per cent to $601 million. Constellation Brands chief executive Robert Sands said that the outlook for wine sales growth in North America remained fairly flat.

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