Constellation Brands to acquire Flagstone

Wednesday, 10 October, 2007
Jeanine Wardman for WineNews
The world's largest wine company has signed a letter of intent to acquire Flagstone Winery, the two parties announced this week at Wines of South Africa's Mega Tasting in London.
Constellation Brands produces, markets and sells a broad portfolio of wines and other alcoholic beverages across the globe. The company entered the South African market in 2006 with the purchase of Canadian wine company, Vincor International which owned the country's largest wine export brand, Kumala – now the biggest selling South African wine in the United Kingdom.
 
The proposed Flagstone acquisition is borne from a need to extend Constellation’s South African portfolio beyond Kumala into premium and luxury brands, according to James Reid, Operations Director of Constellation Wines South Africa.
 
"Kumala competes successfully at the volume-driven, lifestyle sector of the market. We have been looking to build our South African range to meet the global demand for premium and luxury wines which has resulted in the proposed acquisition of Flagstone - an ideal base for a premium portfolio for Constellation in South Africa," he explained. 
 
Flagstone, a 40-70 000 case winery situated near Somerset West, is known for its virtual approach to wine production - and often lateral approach to wine marketing. The winery leases and or manages most of the vineyards from which it sources and is owned by Bruce Jack, one of Brand South Africa's foremost personalities.

Jack's trademark eloquence, charisma and winemaking philosophy are synonymous with the Flagstone name and he will remain the chief viticulturalist, winemaker and marketer of the brand, whilst assuming viticultural and winemaking responsibility for Kumala as well.

A major part of Jack's future brief will be promoting the South African wine message globally for Constellation, dubbed "a major destination marketing drive" for the country by Reid.  

Both core brands will continue to be marketed and sold in South Africa.
  
Once completed the Constellation-Flagstone transaction will mark one of the most significant investments into the South African wine industry by a global wine company to date.

Wines of South Africa's CEO Su Birch told WineNews her organisation is excited about the proposed acquisition. "The investment of the world's biggest wine company in a premium South African winery shows confidence in our country and confidence in the category. Bruce Jack is a dynamic and innovative marketer and winemaker and we look forward to the synergy this partnership will produce."

Mike Ratcliffe from Warwick and Vilafonté said the transaction is a sign of the maturity of the leading edge of South African wine business. "Let's hope that this is the start of the much needed globalization of the South African wine industry. Bruce Jack is a visionary winemaker and marketer and now he has unceremoniously usurped the rights of bigger, more established players to join the ‘big boys’ club. Bravo Bruce!”

Based in part on a media release issued by The Phoenix Partnership on behalf of Flagstone Winery