Edgar Filing: CONSTELLATION BRANDS INC

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 2, 2001
---------------

COMMISSION FILE NUMBER 001-08495

DELAWARE CONSTELLATION BRANDS, INC. 16-0716709
and its subsidiaries:
NEW YORK BATAVIA WINE CELLARS, INC. 16-1222994
NEW YORK CANANDAIGUA WINE COMPANY, INC. 16-1462887
NEW YORK CANANDAIGUA EUROPE LIMITED 16-1195581
ENGLAND AND WALES CANANDAIGUA LIMITED 98-0198402
NEW YORK POLYPHENOLICS, INC. 16-1546354
NEW YORK ROBERTS TRADING CORP. 16-0865491
NETHERLANDS CANANDAIGUA B.V. 98-0205132
DELAWARE FRANCISCAN VINEYARDS, INC. 94-2602962
CALIFORNIA RAVENSWOOD WINERY, INC. 94-3026706
CALIFORNIA ALLBERRY, INC. 68-0324763
CALIFORNIA CLOUD PEAK CORPORATION 68-0324762
CALIFORNIA M.J. LEWIS CORP. 94-3065450
CALIFORNIA MT. VEEDER CORPORATION 94-2862667
DELAWARE BARTON INCORPORATED 36-3500366
DELAWARE BARTON BRANDS, LTD. 36-3185921
MARYLAND BARTON BEERS, LTD. 36-2855879
CONNECTICUT BARTON BRANDS OF CALIFORNIA, INC. 06-1048198
GEORGIA BARTON BRANDS OF GEORGIA, INC. 58-1215938
ILLINOIS BARTON CANADA, LTD. 36-4283446
NEW YORK BARTON DISTILLERS IMPORT CORP. 13-1794441
DELAWARE BARTON FINANCIAL CORPORATION 51-0311795
WISCONSIN STEVENS POINT BEVERAGE CO. 39-0638900
ILLINOIS MONARCH IMPORT COMPANY 36-3539106
(State or other (Exact name of registrant as (IRS Employer
jurisdiction of specified in its charter) Identification
incorporation) No.)

300 WillowBrook Office Park, Fairport, New York 14450
----------------------------------------------- -----
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (716) 218-2169
--------------

-------------------------------------------------------------
(Former name or former address, if changed since last report)

ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE.
-------
Constellation Brands, Inc. released the following information on October 2,
2001:

CONSTELLATION ANNOUNCES 17 PERCENT INCREASE IN EARNINGS
PER SHARE FOR SECOND QUARTER
COMPANY MAINTAINS FULL-YEAR EARNINGS GUIDANCE

FAIRPORT, NEW YORK, OCTOBER 2, 2001 - Constellation Brands, Inc. (NYSE: STZ and
STZ.B) today reported earnings per share on a diluted basis of $0.82 for the
three months ended August 31, 2001 ("Second Quarter 2002"), an increase of 17
percent over earnings per diluted share of $0.70 for the three months ended
August 31, 2000 ("Second Quarter 2001").

Richard Sands, Chairman and Chief Executive Officer of Constellation, said,
"Constellation's strong results reflect the continued execution of our proven
strategy. We experienced growth across all of our business segments. Our primary
growth drivers, imported beer, fine wine and the U.K. wholesale business,
collectively achieved organic sales growth of 15 percent. Through our balanced
approach of organic growth and growth through acquisitions, we are well
positioned to continue our success."

CONSOLIDATED RESULTS
Net sales reached $742 million for Second Quarter 2002, a 16 percent
increase over Second Quarter 2001. On a currency-adjusted basis, net sales
increased 18 percent. Approximately half of the growth resulted from the
inclusion of brands acquired in the Turner Road Vintners and Corus acquisitions
in March 2001, including Vendange, Talus and Alice White, and from the
Ravenswood brand, which was acquired in July 2001 (collectively, the
"Acquisitions"). Excluding the Acquisitions, net sales increased a healthy 10
percent on a currency-adjusted basis, attributed primarily to growth in imported
beer, fine wine and the U.K. wholesale business. Net sales for the six months
ended August 31, 2001 ("Six Months 2002"), reached $1.4 billion, a 13 percent
increase as compared to the six months ended August 31, 2000 ("Six Months
2001"). After adjusting for foreign currency impact, net sales for Six Months
2002 increased 15 percent compared to the prior year period.
Gross profit rose to $238 million for Second Quarter 2002, an increase of
18 percent over Second Quarter 2001. The improvement in gross profit resulted
from increased sales and a 60 basis point improvement in gross profit margin.
The increase in gross profit margin to 32.1 percent resulted primarily from
higher margin brands from the Acquisitions and lower grape costs, partially
offset by higher spirits costs. Gross profit and gross profit margin for Six
Months 2002 were $440 million and 31.8 percent, respectively, compared to $385
million and 31.4 percent for Six Months 2001.
Selling, general and administrative expenses reached $149 million for
Second Quarter 2002, a 15 percent increase from $130 million for Second Quarter
2001. The largest portion of the increase resulted from advertising and
promotion costs associated with brands from the Acquisitions. Second Quarter
2002 selling, general and administrative expenses, as a percent of net sales,
were 20.1 percent, a 30 basis point improvement over the same period a year ago.
Selling, general and administrative expenses for Six Months 2002 increased to
$281 million, representing 20.3 percent of net sales, from $256 million,
representing 21.0 percent of net sales, for Six Months 2001.
Operating income increased to $89 million for Second Quarter 2002 from $71
million for Second Quarter 2001, an increase of 26 percent. For Six Months 2002,
operating income was $159 million compared to $128 million for Six Months 2001.
Net interest expense reached $29 million, an increase of $2 million from Second
Quarter 2001. The higher interest expense was the result of an increase in
average borrowings primarily due to financing related to the Acquisitions,
partially offset by a slightly lower average borrowing rate. Net interest
expense for Six Months 2002 was $59 million, up from $55 million for Six Months
2001.
As a result of these factors, net income reached $36 million for Second
Quarter 2002, a 38 percent increase compared to net income of $26 million for
Second Quarter 2001. Earnings per diluted share for Second Quarter 2002 were
$0.82, a 17 percent increase over earnings per diluted share of $0.70 for Second
Quarter 2001. Net income and earnings per diluted share for Six Months 2002 were
$60 million and $1.39, respectively, versus $44 million and $1.18 for Six Months
2001.

BARTON RESULTS
Barton's Second Quarter 2002 net sales were $302 million, a six percent
increase as compared to Second Quarter 2001. Beer sales increased eight percent,
led by volume increases in Corona Extra, Corona Light and Modelo Especial.
Recent wholesaler beer depletion data reflects growth in the mid-teens. Spirit
sales were flat while spirit volumes increased four percent. Operating income
was $51 million for Second Quarter 2002, an increase of one percent compared to
the prior year.
Barton's net sales and operating income reached $556 million and $95
million, respectively, for Six Months 2002, increases of seven percent compared
to the prior year.

CANANDAIGUA WINE RESULTS
Net sales for Canandaigua Wine for Second Quarter 2002 increased 29 percent
to $218 million. Most of the increase resulted from the addition of sales from
brands acquired in the Turner Road Vintners and Corus acquisitions. Excluding
the acquired brands, branded net sales grew three percent driven by volume.
Operating income more than doubled compared to the prior year to reach $24
million in Second Quarter 2002. The increase was the result of additional
profits from the acquired brands and the positive impact of lower grape prices.
Net sales and operating income for Six Months 2002 were $403 million and
$39 million, respectively, compared to $332 million and $18 million for Six
Months 2001.

MATTHEW CLARK RESULTS
Matthew Clark's net sales for Second Quarter 2002 were $198 million versus
$170 million reported for the comparable quarter a year ago, an increase of 16
percent. After adjusting for foreign currency impact, net sales increased 23
percent. The increase is due to tremendous growth in the wholesale business and
solid growth in the branded business.
Operating income for Second Quarter 2002 reached $14 million, an increase
of 14 percent when compared to $12 million reported for the comparable period
last year. The growth in operating income is primarily related to increased
sales in the wholesale business.
Net sales for Six Months 2002 were $380 million versus $339 million
reported for the same period last year, an increase of 12 percent. Net sales
increased 20 percent adjusting for the impact of foreign currency fluctuations.
Operating income for Six Months 2002 reached $22 million, which was relatively
flat compared to last year.

FRANCISCAN RESULTS
Franciscan's net sales for Second Quarter 2002 were $32 million versus $21
million reported for the comparable quarter last year, an increase of 49
percent. Sales growth this quarter was impacted by the addition of Ravenswood,
which was acquired in July 2001. Excluding Ravenswood, net sales increased 24
percent. This growth was primarily due to volume increases, particularly on
Estancia, Franciscan Oakville Estate and Veramonte. Driven by greater volume and
the addition of Ravenswood, operating income nearly doubled compared to the same
quarter a year ago, reaching $8 million.
Net sales and operating income for Six Months 2002 were $58 million and $15
million, respectively, an increase of 35 percent and 57 percent compared to Six
Months 2001.

OUTLOOK
The following statements are management's current expectations for the
Company's three months ending November 30, 2001 ("Third Quarter 2002"), and
fiscal year ending February 28, 2002 ("Fiscal 2002"). These statements are made
as of the date of this press release and are forward-looking. Actual results may
differ materially from these expectations due to a number of risks and
uncertainties. The following statements include the anticipated impact of the
recently announced acquisition of the Blackstone wine business by Pacific Wine
Partners, the Company's joint venture with BRL Hardy.

- Diluted earnings per share for Third Quarter 2002 are expected to be within
a range of $1.08 to $1.12 versus $0.93 reported for Third Quarter 2001.

- Diluted earnings per share for Fiscal 2002 are expected to be within a
range of $3.03 to $3.08 versus $2.60 reported for Fiscal 2001.

The Company's earnings expectations reflect the impact of Statement of
Financial Accounting Standards No. 142 ("SFAS 142"), "Goodwill and Other
Intangible Assets," as it relates to goodwill and intangible assets acquired
after June 30, 2001. With respect to goodwill and intangible assets acquired
prior to July 1, 2001, the Company will adopt the new accounting rules beginning
March 1, 2002. The Company is currently assessing the financial impact of SFAS
142 on its financial statements.
All share and per share amounts in this press release, including within the
financial statements, reflect the two-for-one stock split of both the Company's
Class A and Class B common stock, which was distributed in the form of a stock
dividend on May 14, 2001.

STATUS OF BUSINESS OUTLOOK AND RELATED RISK FACTORS STATEMENTS
During the quarter, Constellation may reiterate the estimates set forth
above under the heading Outlook (collectively, the "Outlook"). Prior to the
start of the Quiet Period (described below), the public can continue to rely on
the Outlook as still being Constellation's current expectations on the matters
covered, unless Constellation publishes a notice stating otherwise.
Beginning November 19, 2001, Constellation will observe a "Quiet Period"
during which the Outlook no longer constitutes the Company's current
expectations. During the Quiet Period, the Outlook should be considered to be
historical, speaking as of prior to the Quiet Period only and not subject to
update by the Company. During the Quiet Period, Constellation's representatives
will not comment concerning the Outlook or Constellation's financial results or
expectations. The Quiet Period will extend until the day when Constellation's
next quarterly Earnings Release is published, presently scheduled for Thursday,
January 3, 2002.
The statements made under the heading Outlook are forward-looking
statements. Unless otherwise noted, these forward-looking statements do not take
into account the impact of any future acquisition, merger or any other business
combination, divestiture or financing that may be completed after the date of
this release. Further, these statements are based on management's current
expectations and are subject to a number of risks and uncertainties that could
cause actual results to differ materially from those set forth in the
forward-looking statements. For a detailed list of the risk factors that may
adversely impact these forward-looking statements, please refer to Attachment A
set forth below in this press release; please also refer to our Company's
Securities and Exchange Commission filings.

ABOUT CONSTELLATION
Constellation Brands, Inc. is a leader in the production and marketing of
beverage alcohol brands in North America and the United Kingdom and is a leading
independent drinks wholesaler in the United Kingdom. As the second largest
supplier of wine, the second largest importer of beer and the fourth largest
supplier of distilled spirits, Constellation is the largest single-source
supplier of these products in the United States. In the United Kingdom,
Constellation is a leading marketer of wine and the second largest producer and
marketer of cider. With its broad product portfolio, Constellation believes it
is distinctly positioned to satisfy an array of consumer preferences across all
beverage alcohol categories. Leading brands in Constellation's portfolio
include: Franciscan Oakville Estate, Simi, Estancia, Ravenswood, Corona Extra,
Modelo Especial, St. Pauli Girl, Almaden, Arbor Mist, Talus, Vendange, Alice
White, Black Velvet, Fleischmann's, Schenley, Ten High, Stowells of Chelsea,
Blackthorn and K.

CONFERENCE CALL DETAILS
A conference call to discuss the quarterly results will be hosted by
Richard Sands, Chairman and CEO, and Tom Summer, Executive Vice President and
CFO, on Tuesday, October 2, 2001, at 11:00 a.m. EDT. The conference call can be
accessed by dialing (800) 860-2442. A live listen-only web cast of the
conference call is available on the Internet at Constellation's web site:
www.cbrands.com under "Investor Information." If you are unable to participate
in the conference call, there will be a replay available on Constellation's web
site or by dialing (877) 344-7529 from approximately 1:30 p.m. EDT on Tuesday,
October 2, 2001, through 12:00 a.m. EDT on Wednesday, October 10, 2001.

Digital Playback Instructions - Courtesy of ChorusCall

1. Dial 877-DIG-PLAY (877-344-7529) or 412-858-1440.

2. Enter '136' when prompted for your account number followed by the # sign.

3. Please press '1' to play a recorded conference.

4. Please enter '252819' when prompted to enter the conference number followed
by the # sign.

5. Please clearly state your name and company name when prompted to do so
followed by any key.

6. Please press '1' to begin the conference playback.

Note: You may press '0' at anytime during the conference to hear the Detailed
Instructions Menu. You may press '2' at anytime during the conference to
stop the playback entirely. You will be placed in the Introduction Menu.

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CONSOLIDATED FINANCIAL STATEMENTS FOLLOW

CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)

August 31, 2001 February 28, 2001
--------------- -----------------
ASSETS
------
CURRENT ASSETS:
Cash and cash investments $ 6,768 $ 145,672
Accounts receivable, net 406,929 314,262
Inventories, net 769,117 670,018
Prepaid expenses and other current assets 70,987 61,037
--------------- -----------------
Total current assets 1,253,801 1,190,989
PROPERTY, PLANT AND EQUIPMENT, net 560,452 548,614
OTHER ASSETS 1,092,458 772,566
--------------- -----------------
Total assets $ 2,906,711 $ 2,512,169
=============== =================

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Notes payable $ 88,991 $ 4,184
Current maturities of long-term debt 75,854 54,176
Accounts payable 149,481 114,793
Accrued excise taxes 45,496 55,954
Other accrued expenses and liabilities 256,953 198,053
--------------- -----------------
Total current liabilities 616,775 427,160
LONG-TERM DEBT, less current maturities 1,284,120 1,307,437
DEFERRED INCOME TAXES 132,521 131,974
OTHER LIABILITIES 33,238 29,330
STOCKHOLDERS' EQUITY 840,057 616,268
--------------- -----------------
Total liabilities and stockholders' equity $ 2,906,711 $ 2,512,169
=============== =================

CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)

Three Months Three Months
Ended Ended Percent
August 31, 2001 August 31, 2000 Change
--------------- --------------- -------

Gross sales $ 951,228 $ 828,668 15%
Net sales $ 741,530 $ 637,490 16%
Cost of product sold (503,854) (436,851) 15%
--------------- ---------------
Gross profit 237,676 200,639 18%
Selling, general and administrative expenses (148,812) (129,935) 15%
--------------- ---------------
Operating income 88,864 70,704 26%
Interest expense, net (28,974) (27,187) 7%
--------------- ---------------
Income before income taxes 59,890 43,517 38%
Provision for income taxes (23,956) (17,407) 38%
--------------- ---------------
Net income $ 35,934 $ 26,110 38%
=============== ===============

Earnings per common share:
Basic $ 0.85 $ 0.71 20%
Diluted $ 0.82 $ 0.70 17%
Weighted average common shares outstanding:
Basic 42,414 36,600 16%
Diluted 43,932 37,328 18%

Segment Information:
Net sales:
Barton
Beer $ 229,186 $ 212,159 8%
Spirits 72,514 72,561 0%
--------------- ---------------
Net sales $ 301,700 $ 284,720 6%
Canandaigua Wine
Branded $ 199,848 $ 149,272 34%
Other 18,001 19,560 -8%
--------------- ---------------
Net sales $ 217,849 $ 168,832 29%
Matthew Clark
Branded $ 78,161 $ 76,368 2%
Wholesale 119,469 93,310 28%
--------------- ---------------
Net sales $ 197,630 $ 169,678 16%
Franciscan $ 31,948 $ 21,393 49%
Intersegment eliminations $ (7,597) $ (7,133) 7%
--------------- ---------------
Consolidated net sales $ 741,530 $ 637,490 16%
=============== ===============

Operating income:
Barton $ 51,361 $ 50,613 1%
Canandaigua Wine 23,797 10,382 129%
Matthew Clark 13,968 12,222 14%
Franciscan 8,098 4,242 91%
Corporate Operations and Other (8,360) (6,755) 24%
--------------- ---------------
Consolidated operating income $ 88,864 $ 70,704 26%
=============== ===============

CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)

Six Months Six Months
Ended Ended Percent
August 31, 2001 August 31, 2000 Change
--------------- --------------- -------

Gross sales $ 1,787,002 $ 1,603,190 11%
Net sales $ 1,383,640 $ 1,223,070 13%
Cost of product sold (944,014) (838,558) 13%
--------------- ---------------
Gross profit 439,626 384,512 14%
Selling, general and administrative expenses (280,839) (256,344) 10%
--------------- ---------------
Operating income 158,787 128,168 24%
Interest expense, net (59,159) (54,814) 8%
--------------- ---------------
Income before income taxes 99,628 73,354 36%
Provision for income taxes (39,851) (29,342) 36%
--------------- ---------------
Net income $ 59,777 $ 44,012 36%
=============== ===============

Earnings per common share:
Basic $ 1.43 $ 1.20 19%
Diluted $ 1.39 $ 1.18 18%
Weighted average common shares outstanding:
Basic 41,834 36,530 15%
Diluted 43,126 37,243 16%

Segment Information:
Net sales:
Barton
Beer $ 412,171 $ 375,293 10%
Spirits 143,831 145,107 -1%
--------------- ---------------
Net sales $ 556,002 $ 520,400 7%
Canandaigua Wine
Branded $ 367,674 $ 293,838 25%
Other 35,239 38,457 -8%
--------------- ---------------
Net sales $ 402,913 $ 332,295 21%
Matthew Clark
Branded $ 145,144 $ 145,983 -1%
Wholesale 234,475 193,233 21%
--------------- ---------------
Net sales $ 379,619 $ 339,216 12%
Franciscan $ 58,341 $ 43,282 35%
Intersegment eliminations $ (13,235) $ (12,123) 9%
--------------- ---------------
Consolidated net sales $ 1,383,640 $ 1,223,070 13%
=============== ===============

Operating income:
Barton $ 95,412 $ 89,448 7%
Canandaigua Wine 39,192 18,200 115%
Matthew Clark 22,285 22,596 -1%
Franciscan 15,146 9,658 57%
Corporate Operations and Other (13,248) (11,734) 13%
--------------- ---------------
Consolidated operating income $ 158,787 $ 128,168 24%
=============== ===============

ATTACHMENT A

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

The Company makes forward-looking statements from time to time and desires
to take advantage of the "safe harbor" which is afforded such statements under
the Private Securities Litigation Reform Act of 1995 when they are accompanied
by meaningful cautionary statements identifying important factors that could
cause actual results to differ materially from those in the forward-looking
statements.

The statements set forth in this press release, which are not historical
facts, are forward-looking statements that involve risks and uncertainties that
could cause actual results to differ materially from those set forth in the
forward-looking statements. Any projections of future results of operations, and
in particular, (i) the Company's estimated diluted earnings per share for the
quarter ending November 30, 2001, and (ii) the Company's estimated diluted
earnings per share for the twelve months ending February 28, 2002, should not be
construed in any manner as a guarantee that such results will in fact occur.
There can be no assurance that any forward-looking statement in this press
release will be realized or that actual results will not be significantly higher
or lower than set forth in or implied by such forward-looking statement. In
addition to the risks and uncertainties of ordinary business operations, the
forward-looking statements of the Company contained in this press release are
also subject to the following risks and uncertainties:

RECENT ACQUISITIONS AND JOINT VENTURE
- Projections of future results of operations include Constellation's
expectations with respect to future performance of recently acquired
businesses, including the expected impact of (i) the Ravenswood
acquisition, and (ii) the operations of Pacific Wine Partners LLC, our
joint venture with BRL Hardy, including the recently announced acquisition
of the Blackstone wine business by the joint venture. These expectations
are based upon the acquired businesses and the operations of the joint
venture achieving certain sales projections and meeting certain cost
targets, and the acquisitions being successfully integrated.

PERFORMANCE OF WHOLESALE DISTRIBUTORS
- In the United States, we sell our products principally to wholesalers for
resale to retail outlets, including grocery stores, package liquor stores,
club and discount stores and restaurants. The replacement or poor
performance of our major wholesalers or our inability to collect accounts
receivable from our major wholesalers could materially and adversely affect
our results of operations and financial condition. Distribution channels
for beverage alcohol products have been characterized in recent years by
rapid change, including consolidations of certain wholesalers. In addition,
wholesalers and retailers of our products offer products, which compete
directly with our products for retail shelf space and consumer purchases.
Accordingly, there is a risk that these wholesalers or retailers may give
higher priority to products of our competitors. In the future, our
wholesalers and retailers may not continue to purchase our products or
provide our products with adequate levels of promotional support.

SUPPLIERS, RAW MATERIALS AND PRICE FLUCTUATIONS
- Our business is heavily dependent upon raw materials, such as grapes, grape
juice concentrate, grains, and alcohol from third-party suppliers and
packaging materials. We could experience raw material supply, production or
shipment difficulties, which could adversely affect our ability to supply
goods to our customers. We are also directly affected by increases in the
costs of such raw materials. Although we believe we have adequate sources
of grape supplies, in the event demand for certain wine products exceeds
expectations, we could experience shortages. One of our largest components
of cost of goods sold is that of glass bottles, which have only a small
number of producers. The inability of any of our glass bottle suppliers to
satisfy our requirements could adversely affect our business.

COMPETITION
- We are in a highly competitive industry. The dollar amount and unit volume
of our sales could be negatively affected by our inability to maintain or
increase prices, changes in geographic or product mix, general decline in
beverage alcohol consumption or the decision of our wholesale customers,
retailers or consumers to purchase competitive products instead of our
products. Wholesaler, retailer and consumer purchasing decisions are
influenced by, among other things, the perceived absolute or relative
overall value of our products, including their quality or pricing, compared
to competitive products. Unit volume and dollar sales could also be
affected by pricing, purchasing, financing, operational, advertising or
promotional decisions made by wholesalers and retailers which could affect
their supply of, or consumer demand for, our products. We could also
experience higher than expected selling, general and administrative
expenses if we find it necessary to increase the number of our personnel or
our advertising or promotional expenditures to maintain our competitive
position or for other reasons.

CONSUMPTION OF PRODUCTS WE SELL
Consumer purchasing patterns and preferences may impact the consumption of
the products we sell. There are a variety of factors that may cause consumers to
decrease the amount and type of alcohol products purchased, including but not
limited to the following:

- Concerns about the health consequences of consuming beverage alcohol
products and about drinking and driving;

- A trend toward a healthier diet including lighter, lower calorie beverages
such as diet soft drinks, juices and sparkling water products; and

- Activities of anti-alcohol consumer groups.

- A general decline in economic conditions

EXCISE TAXES AND GOVERNMENT RESTRICTIONS
- In the United States, the federal government and individual states impose
excise taxes on beverage alcohol products in varying amounts, which have
been subject to change. Increases in excise taxes on beverage alcohol
products, if enacted, could materially and adversely affect our financial
condition or results of operations. In addition, the beverage alcohol
products industry is subject to extensive regulation by state and federal
agencies. The federal Bureau of Alcohol, Tobacco and Firearms and various
state liquor authorities regulate such matters as licensing requirements,
trade and pricing practices, permitted and required labeling, advertising
and relations with wholesalers and retailers. In recent years, federal and
state regulators have required warning labels and signage. In the United
Kingdom, Matthew Clark carries on its excise trade under a Customs and
Excise License. Licenses are required for all premises where wine is
produced. Matthew Clark holds a license to act as an excise warehouse
operator and registrations have been secured for the production of cider
and bottled water. New or revised regulations or increased licensing fees
and requirements could have a material adverse effect on our financial
condition or results of operations.

CURRENCY RATE FLUCTUATIONS/FOREIGN OPERATIONS
The Company has operations in different countries and, therefore, is
subject to the risks associated with currency fluctuations. The Company could
experience changes in its ability to obtain or hedge against foreign currency,
foreign exchange rates and fluctuations in those rates. The Company could also
be affected by nationalizations, unstable governments, legal systems or
intergovernmental disputes. These currency, economic and political uncertainties
may affect the Company's results, especially to the extent these matters, or the
decisions, policies or economic strength of the Company's suppliers, affect the
Company's foreign operations or imported beer products.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, each
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

CONSTELLATION BRANDS, INC.

Dated: October 2, 2001 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Executive Vice
President and Chief Financial
Officer

SUBSIDIARIES

BATAVIA WINE CELLARS, INC.

Dated: October 2, 2001 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Treasurer

CANANDAIGUA WINE COMPANY, INC.

Dated: October 2, 2001 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Treasurer

CANANDAIGUA EUROPE LIMITED

Dated: October 2, 2001 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Treasurer

CANANDAIGUA LIMITED

Dated: October 2, 2001 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Finance Director
(Principal Financial Officer and
Principal Accounting Officer)

POLYPHENOLICS, INC.

Dated: October 2, 2001 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
and Treasurer

ROBERTS TRADING CORP.

Dated: October 2, 2001 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, President and
Treasurer

CANANDAIGUA B.V.

Dated: October 2, 2001 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Chief
Financial Officer

FRANCISCAN VINEYARDS, INC.

Dated: October 2, 2001 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
and Treasurer

RAVENSWOOD WINERY, INC.

Dated: October 2, 2001 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
and Treasurer

ALLBERRY, INC.

Dated: October 2, 2001 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
and Treasurer

CLOUD PEAK CORPORATION

Dated: October 2, 2001 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
and Treasurer

M.J. LEWIS CORP.

Dated: October 2, 2001 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
and Treasurer

MT. VEEDER CORPORATION

Dated: October 2, 2001 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
and Treasurer

BARTON INCORPORATED