E. & J. Gallo buys 30 wine brands from Constellation Brands for $810 million

There is turmoil on the U.S. production front, where the two largest wine giants have signed an agreement capable of upsetting the structure of the sector, announced two years ago. Constellation Brands, in its path towards the premiumization of its offer, had decided to get rid of all those brands in its portfolio, of wine and not only, that reach the shelf at a price lower than 11 dollars, selling them to E. & J. Gallo Winery. A deal that also includes the production facilities, located in California, New York and Washington. The transaction, closed after the green light from the Federal Trade Commission, which arrived only on December 23, 2020, thus brings more than 30 wine brands - including Arbor Mist, Black Box, Clos du Bois, Estancia, Franciscan, Hogue, Manischewitz, Mark West, Ravenswood, Taylor and Wild Horse - to E. & J. Gallo Winery, for an investment of $810 million. Much less than expected: two years ago they were talking about 1.7 billion dollars, but several brands have disappeared from the agreement due to the will of the Federal Trade Commission. Constellation Brands, on the other hand, has invested 130 million dollars in New Zealand’s Nobilo, a leading brand among the Sauvignon Blancs, and not only in New Zealand, which will join Ruffino, the historic Chianti brand that has been in the hands of the American group for years. If Constellation Brands continues its course, focusing its future on quality brands, E. & J. Gallo Winery now controls 30% of the wine production of California, without forgetting the branch of the company dedicated to imports, among which stand out Italian wine companies, such as Brancaia and La Marca, and Lux Wines, which imports in the USA historical and important brands such as Allegrini, Argiano, Jermann, Pieropan and Renato Ratti.