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Corona Beer Sales Weak in the US
 Phil Wahba - Reuters
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January 09, 2010
New York - U.S. wine and spirits maker Constellation Brands Inc reported a better-than- expected quarterly profit this week as it cut costs, but investors remained concerned by the disappointing results of a joint venture with Mexico's leading brewer. Constellation's shares were down 0.6 percent in early afternoon trade.
The company, whose wine brands include Robert Mondavi, Clos du Bois and Ravenswood, said sales of its branded wines and the beers it imports had fallen in North America.
The company's sales and profit margins have suffered as many consumers seek out lower-priced drinks in the economic downturn.
But Constellation has pruned its portfolio, closed some facilities, cut jobs and consolidated distribution as it aims to reduce its debt load, steps that are beginning to pay off, an analyst said.
The company owns 50 percent of the joint venture, called Crown Imports, and said that net sales from the venture fell 10 percent, with its share of the profits down 26 percent, during the quarter.
The bad news is Corona is weaker than expected it's completely understood that if you sell branded imported beers versus domestics right now, there is a trade down, said D.A. Davidson & Co analyst Tim Ramey.
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