Gallo set to reclaim top rank as Constellation sells

on 27/12/10 at 5:46 pm

Industry

The E&J Gallo Winery in Modesto, CA

E.&J. Gallo Winery of Modesto is poised to reclaim the top rank in the world with Thursday’s announcement that Constellation Brands Inc. is selling off some of its holdings.

Constellation, based in Victor, N.Y., had knocked Gallo from the No. 1 spot for wine volume in 2003 when it merged with Australian vintner BRL Hardy Ltd.

It announced Thursday that it is selling an 80 percent share of its Australian, South African and British wine business to an Australian private equity firm for about $230 million. The deal is expected to close by the end of January.

Gallo does not disclose its volume or sales figures, but Wine Business Monthly estimated its 2009 output at 78 million cases. Constellation was at 104 million. A Gallo spokesperson could not be reached for comment.

The Modesto company has continued to grow while in second place, said wine industry consultant Jon Fredrikson of Woodside, in the Bay Area.

“Gallo is on a record pace,” he said. “They are having their best year ever. Their mix of products is phenomenal.”

Fredrikson, who tracks wine sales in detail, declined to say just how much Gallo has been making. He did say the company continues to benefit from efficient production, savvy marketing and a family ownership structure that frees it from the short-term demands of Wall Street.

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