Thursday, September 16, 2004

Article on Industry Consolidation

The following article on industry consolidation is credited to, which is ordinarily a very well-respected commentator on the global drinks market:

"Meanwhile, Britain's largest independent wine importer, marketer and distributor, Western Wines, is the most recent prize for North America's largest producer of wine and related products, Vincor International. "
------------------------ a word, no. Vincor, while a very large producer, is Canada's largest producer. Canada, for those without at Atlas, is actually a subset of North America. Perhaps they meant to write "the largest producer of wine North of America"
"and it is possible that...Kendall-Jackson will become the target of a hostile takeover bid"
A hostile takeover? Of a family-owned company? How would one do that, by buying out their bank? Reminds me of the Monty Python hostile-takeover pirate sketch where they fire volleys of file drawers from their office windows into the firm they're taking over....
"Euromonitor International expects Bacardi to focus more heavily on broadening its spirits portfolio, following a stock market flotation, thereby making a divestment of its wine business a more probable scenario."
um, okay. If you consider Martini & Rossi Vermouth and Asti to be a "wine portolio" I guess I won't quibble with that, but I will guffaw, perhaps chortle, and certainly snicker at it.
"An Anglo-French alliance between Allied Domecq and Pernod Ricard would fill substantial gaps in both wine portfolios, giving Allied Domecq a key Australian brand (Jacob's Creek) and Pernod Ricard an important Californian brand (Callaway Coastal),"
"Callaway Coastal" and "important" should not be used in the same sentence unless one were to say: "It is important for Allied Domecq to rid itself of the Callawy Coastal brand". The Temecula Appellation has had little - if any - importance in the recent California wine industry, and is really nothing more than a historical curiosity. Why keep a winery in an appellation which doesn't sell outside of itself? Callaway should've been sold off back in the mid 90's when there was a possibility that any winery would sell well due to the demand for product. Any sale now would come with a huge drop in value after the Glassy-winged Sharpshooter decimated the area like Locusts.
"Other potential targets also expected to be at the centre of the merger and acquisition stage in 2004-2005 include California winery Robert Mondavi and family-owned Australian producer, Casella Wines, owner of the successful Yellow Tail brand."
Mondavi, sure, that's a softball given what they've publicly announced. Obviously everything is in play for them. Yellow Tail, however is not completely family-owned. The label is 50% owned by its importer, WJ Deutsch & Sons, who aren't going to let go of this license to print money any time soon.....


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