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January 17, 2003
New York - based Constellation Brands, the second largest winery in the United States, is holding merger and acquisition talks with Australia's BRL Hardy, which could create the world's largest wine company. According to news reports, Constellation, which is almost three times the size of BRL, initiated the bid. A merger or acquisition would enable Constellation Brands to use BRL Hardy's market clout to increase sales in the United Kingdom, where Constellation has had some difficulties. The UK is by far the United States largest market for wine and after a stellar year during 2001, exports to the UK have managed to barely hold their ground, unchanged for the first 10 months of 2002 compared to the previous year. U.S. wine exports to the world were down 13 percent in quantity during January through October of 2002. The merger could help to increase U.S. exports of wine, with increased market penetration benefiting the whole U.S. wine sector. If the merger takes place it could create some unprecedented efficiencies in the wine industry.
Federal Aid of $11 Million Will Soon Help New York Apple
Growers
Federal aid in the amount of $11 million is expected to start reaching New York apple farmers during the week of January 13, 2003. The aid, part of a national farm relief package, was granted to compensate growers for losses sustained in recent growing seasons. The assistance and better domestic prices this season are expected to help the New York apple growers in the face of difficult economic conditions. In recent years, stagnant fresh domestic demand and overproduction in the United States and overseas have hurt U.S. apples prices. Increased imports of lower-priced apple products, mainly apple juice from China, have lowered prices for juice apples and held back processing, an important outlet for New York apples. A strong U.S. dollar has also made it harder for New York apple farmers to compete, both domestically and internationally. New York, with about 675 apple growers, is the second largest apple-producing state, accounting for about 10 percent of the U.S. crop. Production this season (2002/03) is estimated at around 300,000 tons, more than a third below the 2001/02 crop, which was valued at nearly $130 million.
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