Diageo North America will acquire the Chalone
Wine Group, Napa, Calif., for $260 million. Diageo says the purchase, which
is subject to shareholder and regulatory approval, will yield significant
synergies and is expected to become profitable in the third year of
The Chalone acquisition has been the subject of much
speculation. Diageo outbid, by $2.50 per share, a previous agreement with a
joint venture company created by Constellation Brands, Domaines Barons de
Rothschild-Lafite (DBR) and the Huneeus family. Prior to the agreement with
Diageo, Chalone terminated its agreement with DBR, and Diageo will pay a
$2.475 million termination fee on Chalone’s behalf.
“The compatibility of Chalone’s operations
to our existing Diageo Chateau and Estate Wines business will enhance our
ability to integrate the two businesses and to innovate, to the benefit of
the enlarged range of premium brands,” said Diageo North America
President and Chief Executive Officer Ivan Menezes of the acquisition.
If approved, the agreement is expected to close in the
first quarter of 2005.
New rules for FMBs
The U.S. Alcohol Tobacco
and Trade Bureau has established new guidelines for flavored malt beverages
that require at least 51 percent of the alcohol in the products be from the
brewing process rather than from distilled spirits. Manufacturers will have
until January 2006 to change their formulas if they do not currently comply
with the new regulation.
The Bureau took up the issue because beer and
distilled spirits are taxed at different rates, and regulators were unsure
how to classify the drinks.
SoBe hit with fine
PepsiCo’s South Beach Beverage Co. has been fined $219,000 by
the state of Connecticut for false advertising and packaging on products
that claimed to protect against colds and fatigue.
The company has said it cooperated with the
Connecticut Attorney General’s Office to resolve the matter, and that
the messages in question have not been printed on SoBe products for at
least two years.
Constellation completes Mondavi acquisition
Constellation Brands Inc.,
Fairport, N.Y., has completed the purchase of
winemaker Robert Mondavi Corp. Mondavi
shareholders overwhelmingly approved the deal that makes Mondavi a
wholly-owned subsidiary of Constellation.
“Today opens a new chapter for Constellation and
the Robert Mondavi brand,” said Constellation Brands Chairman and
Chief Executive Officer Richard Sands. “With the successful
completion of this landmark transaction, Constellation offers an unmatched
wine portfolio with expanded fine wine offerings, in addition to our broad
portfolio of leading brands in the spirits and imported beer categories and
unparalleled global distribution capabilities.”
Constellation reportedly does not plan to close any of
the Mondavi production facilities, but may have to enact layoffs as it
integrates Mondavi into its fine wine division.
Coca-Cola creates online retailer tool
The Coca-Cola Co. has developed a new online tool to help supermarkets
increase market share based on the way
consumers shop. Located at ccrrc.org, the Web tool developed by the
Coca-Cola Retailing Research Council walks retailers through five
interactive steps, including:
1. Explaining what is on
the minds of consumers during various shopping occasions;
2. Probing the retailer to
determine how consumers experience their stores compared with their top
3. Assessing a
retailer’s performance against competitors;
4. Determining where and
how to strengthen the quality of the shopping experience in the
5. Identifying which need
state the retailer can own and brand to better differentiate from the competition. BI
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