Brown-Forman set to sell wine arm

Brown-Forman has reportedly decided to sell its wine business and is in the process of looking for a suitor.

According to the Wall Street Journal, the Kentucky-based drinks firm producer has hired Rothschild to run the auction process.

Bids are anticipated to come from private-equity firms and other global wine and spirits companies, according to the report, which notes that the unit is expected to sell for a few hundred million US dollars.

The Brown-Forman wine arm, which has delivered disappointing sales for several years now, includes brands such as Fetzer and Bonterra Vineyard.

The move would follow Brown-Forman’s sale of its Italian wine brands in December 2008.

The news is the latest in a spate of industry cutbacks as wine companies face up to struggling sales and ailing demand.

Constellation Brands, the world’s largest winemaker, is also reported to be close to selling the bulk of its non-US wine portfolio to an unknown buyer, according to the WSJ.

The potential sale of its UK and Australian divisions could generate bids as high as US$300 million or US$400 million, the sources said.

Meanwhile Foster’s recently rejected a bid for its wine business from a suitor reported be private-equity firm Cerberus Capital Management.

Fortune Brands sold its US wine business to Constellation for $885 million about three years ago.

Alan Lodge, 22.12.2010