Bright Food, one of China’s largest food groups, is diversifying into the wine sector by acquiring a 70% stake in Diva Bordeaux for an undisclosed sum. The move is in line with the Chinese group’s strategy of developing globally.

Bright Food recently acquired 60% of Weetabix Food Company, the second largest branded manufacturer by value of ready-to-eat cereals and cereal bars in theUK, from private equity firm Lion Capital for an enterprise value of £1.2 billion.

Abrau Durso, the largest sparking wine producer in Russia, has been floated on the Russian stock exchange. The IPO is expected to raise $15 million for a 15% stake by the end of April.

The proceeds will be used to develop tourism in the Krasnodar region of Russia, where Abrau Durso is based. Abrau Durso also plans to double production up to 34 million bottles by 2015.

The company was founded in 1870 and has been majority owned by SLV Group since 2006. Following modernisation Abrau Durso increased production from 4 million bottles in 2005 to 14 million in 2008. Abrau Durso became the first Russian wine company to receive an award at the International Wine Spirit Competition in 2010.

Cider is the undisputed success story of the UK alcohol category over the past six years, according to new research from Mintel. It has grown its volume sales by just under a quarter (24%) between 2006 and 2011 and over this period its value sales increased from £1.7 billion to £2.4 billion. With pubs seeing record closures since 2008, cider has performed well above the market by recording a quarter (25%) growth in revenue within this channel – albeit a lesser 5% growth in real value sales between 2006 and 2011.

Cider has seen particularly steep growth in the off-trade over the past five years, experiencing a 67% increase in volume sales and doubling its revenues between 2006 and 2011. Cider’s share of supermarket shelf space has grown exponentially over this time and in 2010 accounted for 40.7% of UK cider volume sales.

Mintel’s research shows that in terms of penetration, cider has now become the equal of lager, while its steep sales growth in the past five years is the direct opposite of lager’s equally dramatic sales decline. Indeed, consumer demand has skyrocketed and Mintel’s research reveals that, while 10 years ago, 42% of British consumers were cider drinkers – this has now grown to 47% – despite a decline in the UK adult drinking population from 88% to 82% in the past five years alone. This is compared to 46% of consumers who are lager drinkers today.

Indeed, cider’s success is in stark contrast to wine and beer – the most adversely affected in losing actual drinkers, mainly because they are the biggest categories with more to lose. In terms of actual sales, beer has seen the most dramatic decline, losing £2.2 billion in revenue between 2006 and 2011 mainly due to the dramatic decline of the UK pub sector. Meanwhile, wine has seen a decline in the proportion of UK drinkers from 66% in 2007 to 58% in 2011.

“Cider has been particularly successful at attracting younger drinkers from the ailing lager category, as well as from alcopops and wine,” points out Mintel senior drinks analyst Jonny Forsyth, “due to a combination of impressive innovation and marketing nous.”

Furthermore, the sector has potential for much more growth with Mintel forecasting volume sales to increase by 12% between 2011 and 2016 and value sales by a third (33%) as annual above-inflation duty continues to push up retail sales prices (RSP). “This is in a highly challenging context for alcohol but cider has had the advantage of a lower tax than borne by many competitors which it has invested wisely – especially in constant innovation,” says Jonny Forsyth.

However, there is clearly further opportunity for the sector as cider falls massively behind lager in volume consumed; meaning its revenue of £2.4 billion (in 2011) is a fraction of the UK lager market’s total revenues of £11.4 billion. Today, a third (34%) of alcohol drinkers who do not drink cider claim that it ‘never occurs to them to do so’ rather than them actively disliking it.

He continues: “This is a result of cider not being able to compete with lager when it comes to being a ‘session drink’ rather than something you have one or maybe two glasses of, due to the sweetness of its flavour.” It is also less of a mainstream ‘top of mind option’ than lager.

If cider can develop its taste profile – and perception – to account for those with less sweet as well as sweeter palates, it has the potential for a broader appeal. “For example, as an alternative to wine during meal occasions as well as providing the ‘all night’ volume appeal of lager – with the result that it can seriously close the gap on lager’s superior revenue,” reasons Jonny Forsyth.

Hindered by the decline of pub drinking and a lack of broader consumer appeal beyond men, the UK beer market has seen a huge fall from grace in the past six years. Indeed, while the market was worth £17.7 billion in 2006, it will command revenues of just £15.5 billion in 2011 – a £2.2 billion revenue fall – according to latest research from Mintel. Furthermore, volume sales decreased by almost a quarter (23%) over the same period, down from 4.1 billion litres in 2006 to 3.2 million litres in 2011.

The share of off trade as a total has gone up – highlighting a shift towards in home drinking. As more of the UK population drinks at home, beer – as with the likes of wine and spirits – has seen a greater share of its sales within this channel. However, unlike spirits and wine it has still seen its volume sales decline in the off trade – from 2.38 billion litres in 2006 to 2.25 billion litres in 2010.

Jonny Forsyth, senior drinks analyst at Mintel, comments: “The economic downturn and rising differential between on and off trade beer and alcohol prices has hit the pub trade heavily and led to more UK consumers migrating to in home drinking. Beer has been particularly badly hit – it suffers from being perceived as less suited than its competitors for in home drinking. This is because its male user bias makes it less of a compromise choice for couples than wine or spirits, and it is less associated with food matching or relaxing occasions than either of those drinks categories. The reason why beer is reliant on pubs is that it remains a core drink for young men – almost a rite of passage – and many choose it because in pubs, the size and price of a pint seem so much better value than most other drink options.”

Lager dominates the overall beer category and has therefore seen a greater loss of actual revenue over the past six years than ale and stout. Lager sales are down from £12.7 billion in 2006 to £11.4 million in 2011 – a 10% decrease which looks a lot better than it is, due to above-inflation price increases. In 2011, the value of the ale sector had declined to £3.3 billion and stout by £855 million. However, within the market, all beer types are struggling.

Constellation Brands, the world’s leading wine company, has purchased the remaining 50.1% of Ruffino from MPF International, an entity controlled by the Folonari family of Tuscany, Italy, for approximately €50 million, ($69 million). Constellation also assumes approximately €55 million, ($73 million) of debt, net of cash acquired, as part of the transaction.

Constellation now fully owns the iconic Ruffino brand and historical production facility located in close proximity to Florence. The wines continue to be produced on approximately 600 hectares of prestigious vineyards at the same Tuscan Estates of Ruffino as has been done for decades.

Among Ruffino’s most recognised brands are the coveted Ruffino Riserva Ducale, which is celebrating its 80th anniversary vintage this year, and Riserva Ducale Gold, Il Ducale, Chianti Superiore, Lumina and Modus. According to SymphonyIRI industry data for the last 52 weeks, Ruffino is experiencing approximately eight percent growth in dollar sales in the US. Ruffino’s year-to-date global sales are growing at nine percent. The brand has launched a number of new items in the last year, including the highly successful introduction of Ruffino Prosecco sparkling wine.

Of course, Constellation Brands recently disposed of its Australian and European wine business (subsequently renamed Accolade Wines) to Australian private equity firm Champ in a deal worth A$290 million. Accolade Wines incorporates virtually all Constellation’s Australian, UK, and South African brands, wineries, facilities, vineyards, and a 50% interest in Matthew Clark, the UK drinks wholesale joint venture.

Building on record earnings and operating income in its 2011 financial year, Brown-Forman anticipates continued underlying operating income growth for 2012. The US-based international spirits and wine group reported net sales growth of 6% to more than $3.4b in 2011 and increased operating income by 20% to $855m. Excluding the gain on sale from the Hopland-based wine business and certain one-time tax benefits, reported operating income grew 13% to $802m and diluted earnings per share grew 18% to $3.57.

The strong earnings results were supported by underlying net sales growth of 4% and underlying operating income growth of 6% in what continued to be challenging economic, consumer, and competitive environments.

“I am pleased with both our financial results and our strategic progress in fiscal 2011,” says Paul Varga, chief executive of Brown-Forman. “We accelerated our growth rate of underlying net sales over last year and experienced better growth in the second half than the first half on the same measure. Importantly, Brown-Forman continued to implement strategic initiatives, most notably portfolio changes and route-to-consumer enhancements, which we believe will position our brands and company for enduring success.”

Brown-Forman delivered solid net sales growth from developed and emerging markets including Australia, the UK, Mexico, Turkey, Germany, and France. These countries, among others, fueled the company’s international performance and continued to expand its geographic breadth in fiscal 2011. Further positioning the company for continued growth in fiscal 2012 and beyond were recent enhancements to the company’s route-to-consumer in Germany, Brazil, Canada, the Netherlands, and Russia.

In fiscal 2012, the company expects to continue its strong growth internationally while improving its performance in the US. Once again, benefits from the development of existing brands, portfolio expansion, and improved route-to-consumer capabilities are expected to be key contributors to a solid underlying performance in fiscal 2012. Brown-Forman expects to continue to grow the Jack Daniel’s Family while also fueling the growth and expansion of super-premium and developing brands such as Chambord Vodka, el Jimador and Herradura tequilas, Sonoma-Cutrer, and Woodford Reserve.

47% of British adults who buy wine for themselves or others in supermarkets or off licences say that the first thing they decide upon is colour, according to new research published by the Wilson Drinks Report. 18% choose special offers on wine first, 13% choose the retail selling price, 9% decide on grape variety, 6% choose country of origin whilst only 3% choose the brand of the wine.

New consumer research carried out by YouGov for the Wilson Drinks Report also shows that 71% of British adults buy wine for themselves or others in a supermarket or off licence, a significant majority of the population.

Tim Wilson, managing director of the Wilson Drinks Report, comments : “This research is very interesting as it clearly shows that the very first thing that the average British wine shopper decides upon when choosing wine is colour. Supermarkets and off licences that mainly display their wines by colour are doing the right thing, according to our analysis. However, what is also very interesting is that grape variety is more important in shoppers’ decision making than either country of origin or brand. Few retailers display their wines specifically by colour and then grape variety, although some are now trialling wine style and food matching to encourage shoppers to buy better wines.”

The analysis by WDR shows 3 levels of decision making. Of the 47% of shoppers that choose colour first, 27% say that they then choose grape variety and the same proportion (27%) say that offers, including discounts, is their second decision after colour.

The research does not provide good news for wine brand managers. Only 2% of supermarket or off license wine shoppers who mostly drink red wine choose brand first when deciding which wine to buy. It is a similar story for those shoppers who mostly drink white wine : only 3% choose brand first when buying wine.

Constellation Brands, the world’s leading premium wine company, has completed the sale of its Australian and UK business to Champ Private Equity of Australia. The transaction is valued at about A$290m (Eur210m). Constellation has retained a 20% interest in the business and received cash proceeds of about A$230m, which will be used to reduce borrowings.

The businesses sold include virtually all Constellation’s Australian, UK, and South African brands, wineries, facilities, vineyards, and the group’s 50% interest in Matthew Clark, the UK wholesale joint venture. The European business has been renamed Accolade Wines by Champ.

Over the past year value has declined in the UK on-trade across most categories yet value has grown in the off-trade across all categories bar one, according to the latest market data from the Wine & Spirits Trade Association.

The off-trade shows value growth across all categories except fortified wine and volume growth in all categories except ales and fortified wine. The figures for the on-trade show volume decline across all categories of alcoholic drinks and value decline for all categories except standard lager and cider.

Research commissioned by the WSTA also suggests consumers looking to economise are more likely to cut back on going out for meals and entertainment in the next year.

A YouGov poll asked British adults what items of household spending they are likely to cut back on over the next 12 months:

* 46% said going out for meals

* 40% said going out for entertainment

* 34% said going out for a drink

* 20% said spending on satellite TV subscription

* 18% said they do not expect to cut back spending

The breakdown shows 50% of women and 50% of the 25-34 age group would cut back on going out for meals.

The findings are contained in the WSTA’s latest Quarterly Market Report, which features the latest data from leading independent sources including Nielsen and CGA Strategy with analysis by Tim Wilson, author of the Wilson Drinks Report.

Commenting on the figures WSTA chief executive Jeremy Beadles says: “The signs are that consumers remain cautious about their spending and will look to cutback on going out if necessary. However businesses that get the offer right are still doing well. Behind the headlines there are clearly opportunities for growth.  For example, golden rum sales in the on-trade are up in value by over 18% during the past year and sparkling wines are up over 11% in value in the off-trade.”

The WSTA is the UK organisation for the wine and spirit industry representing over 320 companies producing, importing, transporting and selling wines and spirits. Members include all the supermarkets, major off-licence retailers and online businesses, as well as drinks producers, fine wine specialists and logistics companies.

Foster’s, the Australian brewer and wine maker, is reported to have rejected a cash offer of up to A$2.7b (£1.6b) from an unidentified international private equity firm for its troubled, global wine business, which it plans to demerge. The offer was spurned as undervaluing the wine business, which analysts have valued at more than A$3b.

However, the move could well spark the start of a bidding war for the wine arm or for the entire Foster’s business, which has a market capitalisation of almost A$12b.

Foster’s has renamed its wine business as Treasury Wine Estates in advance of the planned demerger next year. With 12,000 hectares of vineyards, 20 wineries and 50 wine brands, including Penfolds, Lindemans, Wolf Blass, Rosemount, Stags’ Leap, Wynn, Beringer and Castello di Gabbiano, Treasury Wine Estates is the second largest wine producer in the world and incorporates some of the most popular and collected wines from Australia, California, France, Italy and New Zealand.

SABMiller, the world’s second biggest brewer, is reported to be considering launching a £7b bid for Carlton & United Brewers, Foster’s beer operation. A successful bid by SABMiller would make it the biggest brewer in Australia and strengthen its standing in the Pacific region. Japanese brewer Asahi is also believed to be interested in Foster’s beer business.

Pernod Ricard, the world’s second largest spirits and wine group, has reported a 1% increase in net profit to Eur951m on net sales down 2% to Eur7.08b for the 2009/10 financial year ended June 30th 2010. Organic sales growth was 2%, including a significant 9% upturn in the second half, but the results reflect negative foreign exchange factors and the disposal of the Wild Turkey, Tia Maria and Bisquit brands and the impact of the termination of Stolichnaya distribution.

The French drinks group noted a contrasting global economic environment, which improved during the second half, featuring strong growth in most emerging economies, and a very gradual recovery of consumer spending in the US against a continuing uncertain backdrop. The picture was mixed in Europe with some signs of a recovery but also the adverse impact of austerity measures.

Pernod Ricard’s top 14 brands, which account for 55% of group sales, grew by 2% in volume and 4% in value. Martell (+12%) and Jameson (+12%) achieved double digit growth and seven others continued to grow, in particular The Glenlivet (+7%), Absolut (+6%), Chivas (+5%) and Havana Club (+5%). Conversely, Mumm (-7%) reported a decline, due to the difficulties in the French champagne market. Within the priority premium wine portfolio, Jacob’s Creek sales declined by 5%, reflecting Pernod Ricard’s premiumisation strategy for the brand.

Group profit from recurring operations rose by 4% to Eur1.79b but the operating margin slipped to 25.4% of sales, compared to 25.6% in the previous financial year. Group debt was reduced by Eur1.09b, excluding translation adjustment, during the year.

Pierre Pringuet, chief executive of Pernod Ricard.

Europe excluding France was the region most affected by the crisis, posting a 3% decline in profit from recurring operations. The situation remained difficult in Western Europe (Spain and the UK) even though a number of countries achieved growth, such as Germany and Sweden, and Duty Free markets noted a recovery. In Eastern Europe, Russia and Ukraine reported a strong upturn in the second half of the year but the situation was more difficult for local vodka brands in Poland. Pernod Ricard saw satisfactory 7% growth in its domestic market of France.

Despite the economic crisis, Pernod Ricard managed to keep growing in new economies, and continued with its premiumisation strategy. “Our performance over the 2009/10 financial year was a strong and sound one. Our priorities for the 2010/11 financial year remain the development of our premium strategic brands, a continuing strong marketing investment level, and the reduction in group debt,” says Pierre Pringuet, chief executive of Pernod Ricard.

A new agreement governing the Eur700 million wine trade between Australia and the European Union comes into force today (1st September 2010).

Replacing an earlier one signed in 1994, the new agreement safeguards the EU’s wine labelling regime, gives full protection to EU geographical indications, including for wines intended for export to third countries, and includes a clear Australian commitment to protect EU traditional expressions. It also provides for the phasing out of the use of a number of important EU names such as Champagne and Port on Australian wines within a year of the agreement coming into force.

“The agreement provides important safeguards for EU wine interests. It ensures the protection of Geographical Indications and traditional expressions for EU wines in Australia and beyond,” says Dacian Ciolos, Commissioner for Agriculture and Rural Development. “The agreement is a win-win outcome and achieves a balanced result for European and Australian wine makers. Crucially, we have obtained the commitment that Australian wine producers will phase out the use of key EU Geographical Indications and traditional expressions for wine. This is of utmost importance for European producers.”

The agreement provides for the immediate protection of other EU Geographical Indications for wines. For the use of some terms, phase out periods have been agreed. In particular, Australian producers will not be able to continue the use of important EU names such as ‘Champagne’, ‘Port’, ‘Sherry’ and other European geographical indications, along with some traditional expressions such as, ‘Amontillado’, ‘Claret’, and ‘Auslese’ from 1st September 2011 onwards – one year after the entry into force of the agreement.

The new agreement safeguards the EU wine labelling regime, by listing optional particulars which may be used by Australian wines (ie an indication of vine varieties, an indication relating to an award, medal or competition, an indication relating to a specific colours, etc) and by regulating the indication of vine varieties on wine labels.

The new agreement also outlines the conditions for Australian wine producers to continue to use a number of quality wine terms, such as ‘vintage’, ‘cream’ and ‘tawny’ to describe Australian wines exported to Europe and sold domestically.

In 2009, EU wine exports to Australia were worth Eur 68 million and Australian exports to the EU were worth Eur 643 million.

SABMiller, the world’s second biggest brewer, is reported to be considering launching a £7b bid for the beer business of Foster’s, the Australian brewer and wine producer. Carlton & United Brewers, Foster’s beer operation, produces Victoria Bitter and Foster’s lager.

A successful bid by SABMiller would make it the biggest brewer in Australia and strengthen its standing in the Pacific region. Japanese brewer Asahi is also believed to be interested in the Foster’s beer business.

Foster’s announced in May that it was going to spin-off its struggling wine business.

Global wines and spirits group Pernod Ricard has reorganised its premium wines and vodka businesses. A new brand company called Premium Wine Brands has been created which is responsible for the development and global strategy of the group’s strategic wine brands. The portfolio includes: Australian wines (Jacob’s Creek), New Zealand wines (Montana and Brancott), as well as Spanish and Argentinean wine brands with international potential (Campo Viejo and Graffigna). The new company’s objective is to accelerate the international development of these brands within the Pernod Ricard distribution network.

Jean-Christophe Coutures, who is currently chairman and chide executive of Pernod Ricard Pacific, becomes the chairman and chief executive of Premium Wine Brands. He will report to Thierry Billot, managing director, brands.

Pernod Ricard has also extended the responsibilities of The Absolut Company to include all the group’s international vodka brands, including Absolut, .Friis and Wyborowa. Its objective is to establish the strategy for the entire vodka segment. In addition, The Absolut Company retains the responsibility for the Malibu and Kahlua brands.

Stephane Longuet, currently vice president finance of The Absolut Company, is appointed chief operating officer of the Standard Vodka division of The Absolut Company and therefore will report to Philippe Guettat, chairman and chief executive of The Absolut Company.

Australian brewer Foster’s has renamed its troubled, global wine business as Treasury Wine Estates in advance of a planned demerger next year. With 12,000 hectares of vineyards, 20 wineries and 50 wine brands, including Penfolds, Lindemans, Wolf Blass, Rosemount, Stags’ Leap, Wynn, Beringer and Castello di Gabbiano, Treasury Wine Estates is the second largest wine producer in the world and incorporates some of the most popular and collected wines from Australia, California, France, Italy and New Zealand.

“Since the acquisition of Mildara Blass and Rothbury Wines Ltd in 1996, Beringer Wine Estates in 2001 and Southcorp Ltd in 2005, we’ve assembled one of the world’s great wine businesses. The creation of Treasury Wine Estates marks the next natural step in that journey, accelerating a cultural change and business transformation that began with the completion of the Wine Strategic Review in February 2009,” points out Ian Johnston, chief executive of Foster’s. “With six of the ten most collected wines in Australia, America’s leading premium brand in Beringer Vineyards, and a collection of outstanding international wines, this is a business with impeccable credentials.”

Foster’s is in the process of restructuring its wine business in preparation for the demerger.