Winebits 161: Constellation sale, Chinese wine fraud, Pennsylvania wine laws

? Constellation exits Australia: The world's biggest wine company has sold its Australian labels as it continues to retrench in the wake of the recession. Constellation Brands is selling its 80 percent stake in a venture that includes Hardys and Banrock Station to an Australian private equity firm for about $230 million. After the sale, it will no longer be the biggest wine company in the world; that honor will go to E&J Gallo. The other catch? Constellation paid $1.1 billion for the Aussie brands when it bought them in 2003, and its timing was perfect — the Australian wine business was entering a slump which has only gotten worse. Which leads the Wine Curmudgeon to wonder: How does a company stay in business after it sells something for only 20 percent of what it paid for it?

? Tainted Chinese wine: Six people have been detained, several wineries shut down and bottles pulled from shelves in China after authorities found wine containing several chemical additives. An expose broadcast by state television found that that wineries were doctoring their products with sugar water, coloring agents and artificial flavorings, and then falsely using famous brand names. No wonder Chinese collectors are paying so much for high-end Bordeaux — at least it's really wine.

? Pennsylvania de-regulating booze? Pennsylvania is a control state, which means all alcohol is sold through state-owned stores and nowhere else. It's the poster child for the control system — but all that may be about to change. Says Philly.com: "But 2011 may usher in a different outcome for the state Liquor Control Board and the 620 wine and spirits stores it runs: Gov.-elect Tom Corbett appears committed to yanking state government out of the business of selling alcohol once and for all." We talk a lot here about government regulation and where it's headed, and there have been big doings over the past couple of years. But Pennsylvania getting out of the booze business? That would be the biggest news yet.

One thought on “Winebits 161: Constellation sale, Chinese wine fraud, Pennsylvania wine laws

  • By Patrick -

    About this time last year there was a big raid on some bar owners in Philly. They confiscated thousands of dollars worth of small batch craft beer. Supposedly, the reason was that the labels hadn’t been registered with the State board. Although, it turns out most had, but the cops and bureaucrats were confused or misinformed. But it got a lot of press because it was obviously politically motivated (there are dozens of bars and only these people were raided because another connected local bar owner didn’t like that they were successful); and it exposed the whole crazy system. For one thing, a brewery not only had to be registered but every label of its beer had to be separately registered. Kind of jump started this whole deregulation.

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