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Sunday, November 30, 2008

GOSH: Constellation Brands buys Peller; merges wine store oprations...



VIAGARA FAILS – (GOSH Wine News Services) – At a stunning Press Conference to be made tomorrow jointly at Viagara Fails, ON and Niagara Falls, NY, Constellation Brands, A Constellation Company, will announce the purchase of Andrew Peller Ltd by Vincor Canada, A Constellation Company.


A senior official familiar with the two companies, and speaking on condition of anonymity because he was not authorized to divulge specific details, commented on this announcement. He said that their only motive was to get the Vineyards Estate Wines stores and boutiques in Ontario. "With these stores, we can now be a tower of strength and compete wine sales with the LCBO, A Crown Corporation."


Apparently, the existing wine properties will be sold off by public auction, said the source, although a deal with Diamond Estates, Not A Constellation Company, is also in the works. Distribution rights to all of the Peller wines would remain with Vincor, A Constellation Company. Liquors and beers are not affected by this new development; they will continue to be sold through the LCBO, A Crown Corporation, and The Beer Store, Not A Crown Corporation.


There are 165 Wine Rack stores in the Vincor, A Constellation Company, portfolio. With Vineyards Estate Wines, there will be about 250, at a critical mass to take on the LCBO's 600 stores.


The strategy is to merge the Wine Rack and Vineyard Estates stores and rename them after the existing wine agency, Churchill Cellars Ltd. Constellation Brands apparently has the numbers and clout, say the retail marketing experts, to put up larger numbers in the table wine business than the LCBO, A Crown Corporation.


"With their combined agency and winery skills, the retail stores of Churchill Cellars Ltd. should be able to offer all the Vincor, Peller, imported Australian, American – and other international wines - that Constellation Brands own or otherwise distribute throughout the world. These products can be vended through the CCL stores, at a lower price than the LCBO is currently asking", says the source familiar with the ins and outs of the international liquor retail and wholesale business.


At the same time, Churchill Cellars Ltd. will continue to sell their wines to licensees and private customers. It will become a multi-faceted company engaging both the public and the private sector. Ontario, A Have-Not Province, Premier Grate McGinty welcomes this new development in the PPP [public-private partnership] spectrum. He said: "With the economy tanking these days, we need to look at new developments through innovative thinking. Enough revenue can be generated from this PPP to more than offset any losses at the LCBO. It also answers those critics who lament a lack of private ownership in the alcohol beverage business in Ontario, A Have-Not Province."


Neither the Wine Council of Ontario nor the Ontario Viniculture Association had any printable comments to make.


The LCBO, A Crown Corporation, has not responded to any emails on this matter, although an anonymous source in their accounting department has said that they have been well aware of the Peller purchase for some time. Everybody in the accounts section had worked 24/7 all week long on restating and resolving the dollar and mark-up numbers. A press conference is expected later this week.


More on this story as it develops…You betcha…



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