NEW YORK (AP) — There may be two more wine businesses up for sale as some parts of the industry struggle with weak sales volumes and pricing.
Brown-Forman Corp., the maker of Jack Daniel’s whiskey, is putting its wine business on the block, The Wall Street Journal reported online late Monday, citing unnamed sources. The company, based in Louisville, Ky., has reportedly hired Rothschild to run the auction process after its wine business — which includes brands such as Fetzer and Bonterra Vineyard — delivered sluggish sales for several years.READ MORE: Luchiano Lewis Pleads Guilty In Deadly Stabbing Of Barnard College Freshman Tessa Majors
The deal could fetch a few hundred million dollars, according to the report. Brown-Forman and Rothschild declined to comment.
The paper also said that people familiar with matter expect Constellation Brands Inc. to sell the bulk of its non-U.S. wine business to an unknown buyer as soon as this week. That deal is reportedly valued between $300 and $400 million.
Constellation Brands, based in Victor, N.Y., did not return calls seeking comment.
Brown-Forman has focused more on its spirits business, which includes Jack Daniel’s, Southern Comfort and Finlandia. Its wine business made up just less than 10 percent of its total $3.2 billion in revenue in its last fiscal year. The company already sold its Italian wine brands business, Bolla and Fontana Candida, in late 2008.
While the buyers are unknown, analysts speculate that private equity firms will be eyeing the offerings from both companies.READ MORE: 7 Pedestrians Hurt After Being Struck By A Vehicle In The Bronx
Constellation is focused primarily on wine — drawing more than 90 percent of its revenue from moderately priced wines such as Clos du Bois and Blackstone. The company also sells liquors such Svedka vodka and Black Velvet Canadian whiskey and some imported beers through a wholesale joint venture.
The company bought Australian vintner BRL Hardy Ltd. in a 2003 deal that made it the world’s largest wine business. It jumped further ahead of longtime wine leader E.& J. Gallo Winery of Modesto, Calif., when it bought Robert Mondavi Corp. for $1.3 billion. But it is facing tough times abroad.
Constellation Brands began restructuring its Australian operations in August 2008 to trim its debts and place greater emphasis on more profitable wines. It sold three wineries and 23 vineyards, ditched more than 30 percent of its product lines and cut 350 jobs. The overhaul was triggered by a variety of setbacks: a drought that undercut the previous two Australian wine harvests, a strong Australian dollar and heightened price competition in Britain, the largest export market for Australian wines.
Constellation Brands has shifted its focus toward higher-priced wines and spirits, selling off some of its lower-price brands after a two-decade acquisition spree. It also has consolidated divisions, cutting its work force to 6,000 people from 8,200 in 2008.
Shares of Constellation Brands fell 23 cents to close at $21.92. Shares of Brown-Forman rose 60 cents to close at $70.61.MORE NEWS: Johnson & Johnson: 2nd Dose Of COVID Vaccine Offers Stronger Protection
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