Market Watch, December 2020

mwNEWSDisaronno BeginsNew Ad CampaignDisaronno has launched a new global advertising campaign titled The Endless Dolce Vita The campaign consists of a commercial that will air on U S TV through the end of the year and appear across Disaronnos social media channels including Instagram Facebook and Snapchat The 30 second spot is in black and white and was shot in Rome juxtaposing classic Italian scenery with contem porary consumers It will air on AMC Bravo Comedy Central and FX among numerous other channels Disa ronno was up 15 worldwide to 16 million cases last year according to Impact Databank Supplier News WineGallo Constellation DealInches ForwardConstellation Brands and E J Gallo Winerys proposed 1 billion deal shifting a number of brands from the former company to the latter has taken another step forward In Novem ber Constellation announced that both companies have signed an FTC Agreement Containing Consent Order that if accepted by the govern ment will allow the deal to close in the fiscal fourth quarter of 2021 The review process typically takes anywhere from 30 45 days The deal in its current form would shift a number of brands priced at or below 11 including Clos du Bois Black Box and Mark West among others from Constellation to Gallo and contains a 250 million earnout if performance goals are met within two years of the deal closing In addi tion Constellation announced that it expects two other substantial sales to finalize by the end of fiscal 2021 which ends next February its 130 million sale of Nobilo also to E J Gallo and its 255 million sale of Paul Masson Grande Amber Brandy to Sazerac Court of Master Sommeliers To Restructure After ScandalThe chairman of the Court of Master Sommeliers Americas CMS A stepped down November 6 and the group announced plans for an overhaul follow ing its earlier suspension of seven male master sommeliers from all activities and the resignation of another All stand accused of sexually harassing women who were pursuing certification with the group Three additional master sommeliers were suspended that same day and an indepen dent investigator has been appointed to follow up on all allegations We agree that a reformed CMS A is the only path forward to ensuring the organizations existence and integrity and to better protect the people who look to be educated and earn the credentials for which we have all worked so hard wrote board vice chair Virginia Philip in a letter to all master sommeliers Philip will oversee the tran sition temporarily taking over from CMS A chairman Devon Broglie who resigned after numerous members of the sommelier community called for his departure and shortly before allegations of his own inappropriate behavior came to public light She said she will oversee the transition and then step down at the end of her term The group held a town hall with members on November 11 to discuss proposed reforms and a timeline for a new board election On November 8 following contin ued criticism the Court publicly posted that the entire 15 member board would be up for election and resign as soon as new officers were voted in The actions were sparked by a New York Times arti cle detailing complaints about six of the men from 21 women who alleged that they had been groped sent explicit texts pressured for sex in exchange for professional favors and even raped Treasury Wine Estates Penfolds Demerger On Hold Treasury Wine Estates TWE is paus ing its previously announced plan to demerge its Penfolds business as it sharpens its focus on restructuring in the U S and surfing tumultuous market conditions in China where new tariffs are being threatened on Australian wines Treasury announced in April that Penfolds which accounts for 10 of company volume and more than half of profits could be spun into its own busi ness to allow the rest of the TWE portfo lio to accelerate its premiumization drive CEO Tim Ford said the company contin ues to see value in that plan but will not complete the demerger by the end of 2021 as previously floated Instead its focusing on building momentum in the U S where its continuing to explore the potential divestiture of selected brands and assets as it stated in August Trea surys Americas region saw sales slip 6 to A 11 billion A 790 million in the year through June with EBITS down 37 to A 147 million 105 million Ford said U S conditions improved in its fiscal first quarter ended in September with total depletions up 5 and its focus brands up 31 He added that the companys Sterling winery saw minor external damage to buildings and surrounds from the recent Califor nia wildfires and that TWE expects its California business to see a reduced overall intake particularly for the luxury tiers driven both by the impact of the fires related smoke taint and lower overall yields Meanwhile TWE said it has been advised that the China Alcoholic Drinks Association CADA has submitted a written request to the Chinese Ministry of Commerce MOFCOM that imports of Australian wine in containers of two liters or less into China be subject to retrospective tariffs Its unclear whether the Chinese government will accede to the request but if enacted the tariffs could stunt Australian wines growth in its largest export market by far Australias ship ments to China advanced 4 to A 117 billion 840 million in the 12 months through September according to Wine Australia Ford said TWE has seen 84 MARKET WATCH MARKETWATCHMAG COM DECEMBER 2020MW1220_