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Constellation’s holiday drink sales less than stellar – CEO

January 7, 2009

FOSTERS/With so many forecasters talking about the 2008 holiday season in extremes (the weakest since 1970, one of the worst in modern times), it’s refreshing to hear an executive suggest that, ok, things were not great, but they weren’t horrible either.

That assessment came on Wednesday from Rob Sands, chief executive of Constellation Brands, when the world’s largest wine producer and maker of Robert Mondavi, Vendage and Ravenswood wines reported third-quarter earnings.  

Sands, whose company also sells spirits and beer, said beer sales growth was accelerating due to the recession, while sales of spirits were getting hurt the most.

Following is an excerpt from a conference call CEO Sands and his management team hosted with analysts in which he discusses the impact of the recession on sales of alcoholic drinks:

          In the United States, market conditions remain pretty healthy as measured by consumer take-away … for the wine business. The spirits business has probably been impacted to the greatest extent with growth … getting near flattish … The beer business has actually accelerated in general during the economic downturn.

Regarding the holiday season, Sands said:

          In the US in particular for beer it wasn’t necessarily a stellar holiday season, but a lot of the IRI data (which tracks sales of packaged goods) that is being quoted is (through) 12/28, whereas last year it was through 12/30 … One of the things that characterized this holiday season is consumers definitely waited until the last minute to do their shopping. So, on beer I think that in the end it will probably wrap up to not be a fantastic holiday season, but on the other hand, I don’t think that it is going to wrap up to be as bad as the … currently published IRI data suggests. 
          On wine … anecdotally from our wholesalers … it appears … consumer take-away was pretty good over the holiday season. So when everything is reconciled we are hopeful that it is going to look pretty good. 

(Photo: Reuters)

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