Mondavi Sells to Constellation for $1.36 Billion

Well no, it’s not beer news. But it is alcoholic beverage news – and big news at that. Robert Mondavi Corp., announced last week that it had agreed to be sold to international giant Constellation Brands Inc. in a historic $1.36 billion deal.

Constellation, the world’s largest wine conglomeration has a diverse portfolio of wines from $30-per-bottle Ravenswood to $2.50 Wild Irish Rose. The company also owns Barton Beers here in the U.S., which is the national importer of Tsingtao and imports brands such as St. Pauli Girl and number one selling import Corona for the western States.

Mondavi, the Napa, California-based global wine company has been hit hard in recent years by the “Two-Buck Chuck” inexpensive wine movement. Failing to position itself as either a high-end wine or able to compete with the profusion of $2 wine specials now prominent in big box retailers. Mondavi was caught in the middle, trying to prop up its huge company on the $7-$9-per-bottle Woodbridge brand. Family feuds also helped steer the company off course. None the less, Mondavi continues to be one of the strongest brands in the wine industry worldwide, and it is expected that little change will be made to the portfolio by Constellation.

The acquisition has fueled a belief from industry analysts that it may trigger additional mergers in the global wine industry. While the beer industry has undergone a major worldwide consolidation in recent years, the wine industry has been very quiet in merger-mania. That appears to be changing, and a new era of mega-wine companies may about to be born.