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Tough' UK hits Constellation

Published:  23 July, 2008

On the back of the departure of a large part of Constellation Europe's senior executive team - chief executive Christopher Carson, marketing senior vice president, Graham Oak, and chief operating officer Richard Peters (with further cuts to
the marketing department rumoured to be in the air) - Constellation supremo Richard Sands has blamed tougher' trading conditions in the UK for only a modest rise in profits.

Excluding the impact of the purchase of Mondavi and Ruffino earlier this year, net sales increased just 3% and profits 2%, with European volumes flat.

Sands told US analysts at a briefing last week: While this growth was a little lower than expected, it reflects tougher trading conditions in the UK market, impacting both our

UK wholesale and branded business.' The UK accounts for around 20% of Constellation Brands' sales.

Sands also used the briefing to dismiss comments by Vincor's management that Sands' hostile bid was inadequate and that other suitors may pay more. We have heard from investment bankers and sell-side analysts, especially in the US, that there doesn't seem to be a lot of interest,' he said.