Constellation Downsizing Down Under In Favor Of U.K. Bottling Expansion

Dan Marsteller
Posted: March 8, 2010

Constellation is moving to shift some wine packaging operations for
the U.K. and Europe from Australia to its U.K. bottling plant in
Avonmouth, western England. The move represents an expanded “in-market
bottling programme” for Constellation, which, as a result, is cutting
40 jobs at its Reynella plant in southern Australia.

Constellation—the world's biggest wine marketer—says the change will improve service and response times for its European customers, lessen currency impacts and reduce its environmental footprint.

The global wine giant enjoyed a 12% increase in organic net sales at
constant currency for its branded wine business in Europe in its last
fiscal quarter results (ended November 30), but acknowledged much of
the jump was due to higher volumes of lower-priced products. The
currency effect on those results was a negative 2%—however, for the
first nine months of its fiscal year, Constellation endured a negative
currency impact of 15%, swinging its European branded wine business
from a 4% net sales gain at constant currency to an 11% loss on a
reported basis.

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