Victor, N.Y., Feb 1, 2013 - (ACN Newswire) - Constellation Brands, Inc. (NYSE: STZ and STZ.B) issued the following statement today in further response to the U.S. Department of Justice's (DOJ) action yesterday concerning the proposed Anheuser-Busch InBev (AB InBev) and Grupo Modelo (Modelo) transaction.
Constellation Brands believes the DOJ's action demonstrates its incomplete understanding of the proposed transaction for at least three primary reasons:
1. Crown Imports, not Modelo, is AB InBev's competitor in the U.S. Corona and the other Modelo brands are sold in the U.S. by Crown Imports LLC (Crown), a joint venture currently owned 50/50 by Constellation Brands and Modelo. An independent company and one of the industry's most successful competitors, Crown imports, warehouses, markets, prices and distributes the Modelo portfolio and other products on an exclusive basis across the U.S.
"The Crown team has built its business into the third largest beer company in the U.S., and it is surprising that the DOJ has overlooked the existence and commercial activities of this highly successful and autonomous business," said Rob Sands, president and chief executive officer of Constellation Brands. "Crown's President Bill Hackett, a 29-year steward of the Modelo brands, and his team of established beer industry veterans have an outstanding track record of brand building and sales execution in the marketplace."
"Our Crown team independently develops implements and refines pricing, promotional and sales strategies for each of our brands in the U.S.," said Bill Hackett, president of Crown, "and we execute strategies and set distributor tactical priorities based on our objective analysis of the competitive dynamics in each local market. Further, our Crown team is responsible for all marketing decisions, including developing the very successful 'Find Your Beach' campaigns that support Corona and other Modelo brands in the U.S. Equally important to consider are the formidable challenges we face to ensure that roughly 170 million cases of beer annually make it safely from multiple foreign breweries to hundreds of distributors and ultimately many thousands of retailers throughout the country."
2. Constellation Brands' acquisition of Modelo's interest in Crown will improve competition. The proposed transaction will enhance Crown's status as an independent and competitive entity and will strengthen Crown's position as a growing competitor to AB InBev in the U.S. beer market. Crown will have complete, autonomous control as the brand owner in the U.S. with respect to its distribution, marketing, promotion and pricing of Corona and the other Modelo brands. Critical to Crown's success is its independent judgment in selecting and collaborating with the best distributor option available in each of Crown's markets. Underscoring Crown's successes in this regard, Hackett added, "I am extremely proud of Crown's track record of working through our industry-leading distributor network to grow share in the highly competitive U.S. beer market, even during challenging economic times."
3. Crown will have even greater flexibility in responding to competitive factors in each of its markets. The new contract ensures that Crown will benefit from both long-term stability in costs of goods provided by AB InBev and from the operational excellence and global scale of the world's leading beer producer. As a result, Crown and consumers can benefit from the considerable efficiencies that are expected to be achieved by the AB InBev/Modelo transaction. Additionally, Crown will immediately have access to several more Mexican beer brands to sell in the U.S., and is guaranteed supply of a certain number of new products each year upon request. In terms of shipment priority, Crown will be on parity with the Mexican domestic market. Finally, Crown is empowered to freely innovate and supplement its offerings in the U.S. beyond the Modelo portfolio at Crown's sole discretion.
Sands reiterated his support for Crown's role in the transaction by stating: "Constellation Brands has stood behind Crown's highly admired portfolio of brands not only for the past six years through the Crown joint venture, but also for the preceding fifteen years when Constellation's subsidiary Barton Beers imported and sold these beers in the western half of the U.S. Constellation is thrilled by the opportunity to redouble its support for Bill Hackett and the entire Crown team in driving Crown's business to even greater successes in the U.S. in the coming years."
About Constellation Brands
Constellation Brands is the world's leading premium wine company that achieves success through an unmatched knowledge of wine consumers, storied brands that suit varied lives and tastes, and more than 4,400 talented employees worldwide. With a broad portfolio of widely admired premium products across the wine, beer and spirits categories, Constellation's brand portfolio includes Robert Mondavi, Clos du Bois, Kim Crawford, Inniskillin, Franciscan Estate, Mark West, Ruffino, Simi, Estancia, Corona Extra, Black Velvet Canadian Whisky and SVEDKA Vodka.
Constellation Brands (NYSE: STZ and STZ.B) is a S&P 500 Index and Fortune 1000(R) company with more than 100 brands in our portfolio, sales in about 100 countries and operations in approximately 40 facilities. The company believes that industry leadership involves a commitment to our brands, to the trade, to the land, to investors and to different people around the world who turn to our products when celebrating big moments or enjoying quiet ones. We express this commitment through our vision: to elevate life with every glass raised. To learn more about Constellation, visit the company's website at www.cbrands.com .
Angela Howland Blackwell: +1-585-678-7141
Cheryl Gossin: +1-585-678-7191
Patty Yahn-Urlaub: +1-585-678-7483
Bob Czudak: +1-585-678-7170
This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients.
The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and other applicable laws; and
(ii) they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Constellation Brands Inc via Thomson Reuters ONE
Topic: Press release summary
From the Asia Corporate News Network
Copyright © 2015 ACN Newswire. All rights reserved. A division of Asia Corporate News Network.
|Oct 7, 2015 20:00 HKT/SGT|
|Constellation Brands Reports Second Quarter Fiscal 2016 Results|
|Sept 30, 2015 05:20 HKT/SGT|
|Constellation Brands, Employees Team Up to Donate $100,000 for Northern California Wildfire Relief|
|Sept 11, 2015 08:20 HKT/SGT|
|Constellation Brands to Report Second Quarter Fiscal 2016 Financial Results; Host Conference Call October 7, 2015|
|Aug 18, 2015 22:40 HKT/SGT|
|Constellation Brands Acquires Minority Stake in Chicago-based Crafthouse Cocktails|
|Aug 4, 2015 05:35 HKT/SGT|
|Constellation Brands Completes Meiomi Wine Acquisition|
|July 1, 2015 23:00 HKT/SGT|
|Constellation Brands Reports First Quarter Fiscal 2016 Results|
|June 18, 2015 11:15 HKT/SGT|
|Rob Sands, President and CEO of Constellation Brands Meets with President Pena Nieto of Mexico|
|June 16, 2015 07:00 HKT/SGT|
|Constellation Brands Announces Senior Management Change|
|Oct 21, 2014 09:15 HKT/SGT|
|Constellation Brands Announces Full Redemption of 8 3/8% Senior Notes Due 2014|
|Oct 21, 2014 09:10 HKT/SGT|
|Constellation Brands Prices Offering of Senior Notes|
|More news >>|