Constellation in Canada & Pernod in China

Constellation floating in Canada

News is circulating that Constellation Brands is getting closer to floating its Canadian wine business and has put a value of C$1 billion ($1.05 billion) on the business. It’s said the company will list on the Toronto Stock Exchange in the autumn. It will join Corby Spirit and Wine Ltd (CSW), a Toronto-based distributor that is closely aligned with Pernod Ricard. Last year CSW turned over C$132 million.

The new Constellation group will include eight wineries, six of Canada’s top-selling wine brands and 160 retail stores in Ontario.

Pernod plodding in China

Meanwhile, Pernod Ricard (PR) continues to find its sales in China are not rebounding as it hoped. The company has already warned the market to expect a 10 per cent drop in Chinese revenue this financial year (to the end of July). China is said to contribute 9 per cent of PR sales. The US remains PR’s major market, contributing 17 per cent of total revenue.

Toro on the charge

Chilean wine producer Concha Y Toro, which owns Trivento in Argentina and Fetzer in the US, has released its first-quarter results. It’s doing well, posting a CLP9.3 billion profit ($18.5 million) in the quarter on sales of CLP132.16 billion.

Net sales rose 13.6 per cent and profit was up 24.1 per cent. As with Australian Vintage, less volume resulted in greater value for the company. Exports increased 7.7 in volume but returned value increase of 11 per cent. Asia produced growth of 40 per cent in volume.

The above figures are for the whole group. Trivento sales increased 12.5 per cent in volume and 12.3 per cent in value. The California-based Fetzer Wine Company increased domestic sales 8.3 per cent and exports 15.6 per cent in volume. Value was up 17.3 per cent. Again, like Australian Vintage, bulk wine sales were down, in this case 95 per cent.

Concha Y Toro export markets are interesting but could do with greater detail. More than half the company’s exports go to the EU, but how much of that is to the UK?

Conca Y Toro

Can anyone stop Aldi?

Aldi’s arrival in Australia about 15 year’s ago didn’t cause much of a stir at the time, but since then the German discounter has stirred the supermarket pot vigorously.

It appears Aldi is unstoppable, but its major rivals, Woolworths and Coles, are fighting back.

Woolworths is to do away with its “Select” private label brand. The new “Woolworths” private label brand will be focused on food and cover about 2000 products. The aim is to take on Aldi, whose use of own label brands is extensive.

Aldi has also upset the established supermarkets in the UK, including Tesco, long-time leader of the gang of five, which also includes Sainsbury’s, Asda, Morrisons and the Co-op.

Reports say Tesco is to reduce its SKUs from about 90,000 to about 60,000. This, in part, is to combat Aldi and Lidl. A recent article in The Guardian gave this example:

“For each big brand, every pack size and flavour is a different SKU. With tomato ketchup, Tesco offers a bewildering array of 28 sauces while in Aldi there is just one ketchup in one size.”

According to Kantar Retail, the average household buys only 400 products a year, with just 41 items in its weekly shop.

If it’s any consolation to the Woolworths and Tesco, Aldi does not sit at the right hand of the supermarket god.

The Aldi Nord group (Australia is part of Aldi Sud) has announced a loss of 297 million kroner ($61.1 million) for its last fiscal year in Denmark. This brings the five-year total losses to 945 million kroner.

A spokesperson for Aldi said reasons included some consumers unfairly accusing Aldi of underpaying its staff and selling low-quality products. Another reason could be there are several discount chains in Denmark, including Netto, Fakta, Rema 100, Kiwi and Lidl.

Aldi Nord is also involved in a family feud. The scrap is between Theo Albrecht Jr and his deceased brother Berthold, Berthold’s widow Babette, and her five children. It’s a power struggle involving three family foundations. Theo follows a quiet lifestyle, rarely making public statements and guarding the family reputation. Apparently Babette is more outgoing.

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