Wine Industry Report

- Constellation to increase focus on faster-growing, higher-margin wine
- Proceeds will reduce borrowings
- Company updates fiscal 2008 outlook

Constellation Brands, Inc. (NYSE: STZ, ASX: CBR), a leading international producer and marketer of beverage alcohol, today announced that in its ongoing effort to focus on its premium wine offerings in the U.S., it has entered into an agreement to sell the Almaden and Inglenook wine brands, and the Paul Masson winery located in Madera, Calif., to The Wine Group LLC for $134 million in cash, subject to closing adjustments. Close of the transaction is subject to routine and customary regulatory review, and is expected by the end of Constellation’s fiscal year on Feb. 29, 2008.

“This transaction, when coupled with the recent acquisition of Clos du Bois, the number one super-premium U.S. wine brand, will allow our wine sales forces to focus on selling higher-growth, higher-margin premium wines,” said Rob Sands, Constellation Brands president and chief executive officer. “This change also demonstrates our commitment to improve return on invested capital.”

Almaden and Inglenook are table wines which retail for less than $3.00 per 750 ml bottle equivalent. The Mission Bell Winery, also in Madera, Calif., will be retained and allows the company to increase premium wine production in California’s important San Joaquin Valley wine producing region. This winery will also provide wine production services to The Wine Group for a period of time on a contract basis.

The transaction is expected to result in a pre-tax loss of
approximately $27 million or an after-tax loss of $0.13 diluted earnings per share on a reported basis, and will be excluded from the company’s comparable basis earnings per share. The loss on the disposal is primarily driven by the higher write-off of goodwill unrelated to these brands as required by generally accepted accounting principles in the U.S. and the low tax basis associated with goodwill.

Proceeds from the transaction will be used to reduce borrowings. The impact of this transaction is expected to be slightly dilutive to ongoing reported basis and comparable basis diluted earnings per share for fiscal 2009. The Almaden and Inglenook wine brands are expected to generate approximately $130 million of net sales for fiscal 2008, and represent approximately 10 million 9-liter cases of the company’s U.S. wine volume.

The proceeds from this transaction do not impact free cash flow, and therefore the company’s free cash flow guidance for fiscal 2008 remains unchanged at $280 - $300 million.

Outlook

The table below sets forth management’s current diluted earnings per share expectations for fiscal 2008 on a reported basis and a comparable basis.

                    Constellation Brands Fiscal Year 2008
                      Diluted Earnings Per Share Outlook

                                       Reported Basis     Comparable Basis
                                           FY08                 FY08
                                         Estimate             Estimate

    Fiscal Year Ending Feb. 29        $0.93 - $0.98         $1.33 - $1.38

    The above guidance is based on information previously provided, taking
into account the developments described above. In addition to the loss on
the transaction, the change in the company's fiscal 2008 reported basis
diluted earnings per share guidance includes, and is limited to, the
following tax rate assumption:

    -- Tax rate: approximately 42 percent on a reported basis, which includes
       a provision of approximately two percentage points on the disposal in
       connection with the company's contribution of its U.K. wholesale
       business to the Matthew Clark joint venture and the repatriation of
       proceeds associated with the joint venture, and a provision of
       approximately three percentage points on the disposal of the Almaden
       and Inglenook brands and Paul Masson winery, or approximately 37
       percent on a comparable basis.

    Explanations

    Reported basis ("reported") diluted earnings per share are as reported
under generally accepted accounting principles. Diluted earnings per share
on a comparable basis ("comparable"), excludes acquisition-related
integration costs, restructuring and related charges and unusual items.

    The company discusses additional non-GAAP measures in this news
release, including free cash flow.

Tables reconciling non-GAAP measures, together with definitions of these measures and the reasons management uses these measures, are included in this news release.