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Wine Sales Continue to Climb in US |
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Monday, 28 July 2008 |
America's on track to become the world's biggest consumer of wines - passing France, Italy and Spain.
Though good news for vineyards, distillers of hard liquor aren't that happy to see drinking habits change - unless, of course they happen to also sell wines with their hard stuff.
Last week, Fortune Brands - maker of Jim Beam and Canadian Club - suffered a 41 percent tumble in its profits to $136 million on revenue of $21 billion. In six months since January, hard liquor sales fell 12.5 percent to $267.2 million.
What's worse, Fortune sold its profitable wine division eight months ago and missed out on the bonanza. Shares are off 19 percent this year to $58.78.
Meanwhile, chewing-tobacco and snuff giant UST, maker of Skoal and Copenhagen, said that thanks to wine it managed to hold down its profit slide to $139.7 million from $140 million the previous year amid a revenue rise of 3 percent to $506.2 million.
Its wine sales, including pricey labels Stag's Leap and Conn Creek, soared 25 percent to $99.1 million as division profits soared 30 percent.
Constellation Brands, the world's biggest wine company by volume, said three weeks ago its first-quarter profit jumped 50 percent, aided by its high-margin labels Clos du Bois and Wild Horse. It earned $29.8 million, or 20 cents a share.
Elsewhere, Brown-Forman of the UK, which makes both wines and spirits, said the US will become the world's biggest consumer of wines late this year, drinking 25 percent of the globe's output, and paying much more for it.
US wine prices are twice that of France and triple those in Italy, the firm said.
Brown-Forman's sales of spirits, including Jack Daniels, jumped 19 percent in fiscal 2008 to $2.89 billion from $2.42 billion. Sales of wines, including Fetzer and Bolla labels, rose 1.3 percent to $386 million from $381 million.
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