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Constellation may struggle to sell off assets

Published:  15 August, 2008

Constellation Brands may struggle to sell off the $200 million worth of assets it has put up for sale, according to press reports.

Constellation Brands may struggle to sell off the $200 million worth of assets it has put up for sale, according to press reports.


The Australian Business has reported that listed winemakers appear to lack either the funds or inclination to buy.


Constellation announced earlier this month that it was putting its wineries in Clare and Padthaway in South Australia and Mount Barker in Western Australia up for sale, stating that it wanted to hold onto the Leasingham, Stonehaven and Goundrey wine brands made at those sites and instead offer new owners contracts to buy the grapes they produce.


Reports suggest that even the private buyers who have bailed Constellation out in the past over the troubled Xanadu, Seppeltsfield and Oak Ridge wineries are "unlikely" to make an offer. Many, including McWilliams, Kilikanoon and Rathbone Wines have already made recent purchases.


Constellation has said that its decision to sell off three of its ten wineries is part of its plan to focus more on its higher-priced wine brands. It is also planning to consolidate its bottling operations, sell off more than 20 of its vineyard properties and scrap more than 30% of its production lines. Up to 350 employees will lose their jobs as a result of the move.

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