Consternation Brands and US Surgeon General

Constellation shines bright

Constellation Brands is doing very well. Its board has authorised a new share repurchase program of up to US$1 billion ($1.35 billion) of the company’s common stock to be utilised over time.

It already has a US$1 billion program underway, so adding another should make those shareholders intending to stay long term extremely happy.

Health worries

The US Surgeon General has released a massive 428-page report on alcohol, drugs and health, titled Facing Addiction in America. Some of the statistics are overwhelming:

  • In 2015, 66.7 million people in the US reported binge drinking in the past month
  • Alcohol misuse contributes to 88,000 deaths in the US each year; 1 in 10 deaths among working adults are due to alcohol misuse
  • Alcohol misuse and alcohol use disorders alone costs the US about US$249 billion ($339 billion) in lost productivity, healthcare expenses, law enforcement and other criminal justice costs
  • More than 175 million people aged 12 and older (65.7 per cent of the population) reported alcohol use in the past year

Alcohol is separated into four categories: beer, wine, malt liquor (high-alcohol beer) and distilled spirits (gin, vodka, whisky etc).

Binge drinking in the US for men is five or more standard alcoholic drinks, and for women, four or more standard alcoholic drinks, on the same occasion on at least one day in the past 30 days.

The survey found the following had been involved in binge drinking in the past month:

  • 6 per cent of men
  • 5 per cent of women

Of greater interest was the breakdown:

  • 1 per cent of American Indians or Alaska Natives
  • 7 per cent of Hispanics or Latinos
  • 0 per cent of Whites

The Centres for Disease Control and Prevention (CDC) reports more than 2200 alcohol overdose deaths in the US each year—an average of six deaths every day. More than three-quarters (76 per cent) of alcohol overdose deaths occur among adults between ages 35 and 64, and 76 per cent of those who die from alcohol overdose are men.

What isn’t revealed in the report is what form of alcohol is responsible for death or binge drinking. Beer seems to be the biggest culprit but more facts would be welcome.

Bordeaux and Chinese takeaway

The Chinese Huiyuan Juice Group has acquired seven Bordeaux properties and is involved in the purchase of another four.

In 2012 the company announced it was going to invest about US$80 million in wine and kicked off with 333 hectares in Liuhe county, Jilin province.

The idea for the Bordeaux properties is to export about two-thirds of total production to China. Apparently there are 120-plus Bordeaux properties in Chinese hands.

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