Constellation, Brown-Forman and Diageo face US lawsuits
Three of the world’s biggest beverage companies, Constellation Brands, Brown-Forman and Diageo, are at the centre of lawsuits in the US. Shareholders and consumers claim they were misled about financial results and product ingredients. The post Constellation, Brown-Forman and Diageo face US lawsuits appeared first on The Drinks Business.
Three of the world’s biggest beverage companies, Constellation Brands, Brown-Forman and Diageo, are at the centre of lawsuits in the US. Shareholders and consumers claim they were misled about financial results and product ingredients.
Both Constellation Brands and Brown-Forman are accused of misleading investors and thereby causing them to lose money, while Diageo is said not to have told the truth about the contents of its “100% agave” Tequila brands.
After weeks of American lawyers urging shareholders to sue Constellation Brands, they are now on the trail of Brown Forman.
The Constellation action claims that the company made “false and misleading statements that failed to disclose material adverse facts” about the level of sales in its wine and spirits division between April 2024 and January 2025.
In the past 12 months, Constellation’s shares have fallen in value by more than a third to about US$165.
The company has not commented on the case being brought in a New York court, although it may do so next week as part of its latest results announcement.
At the start of April, Constellation trimmed its sales outlook for the next three years and announced plans to sell underperforming wine brands to the Wine Group for an undisclosed sum.
The shareholder allegations claim the company conspired to inflate its performance in the category ahead of the sale.
The lawsuit alleges that, before the sale, Constellation misled investors with earnings statements that suggested the company’s wine holdings were set for growth.
CEO Bill Newlands told investors in an earnings call in April 2024 that it was working to boost the price mix and media spending on its wine brands, which the lawsuit claims was “materially false and misleading.”
Both Constellation Brands and Brown-Forman are accused of misleading investors and thereby causing them to lose money, while Diageo is said not to have told the truth about the contents of its “100% agave” Tequila brands.
After weeks of American lawyers urging shareholders to sue Constellation Brands, they are now on the trail of Brown Forman.
The Constellation action claims that the company made “false and misleading statements that failed to disclose material adverse facts” about the level of sales in its wine and spirits division between April 2024 and January 2025.
In the past 12 months, Constellation’s shares have fallen in value by more than a third to about US$165.
The company has not commented on the case being brought in a New York court, although it may do so next week as part of its latest results announcement.
At the start of April, Constellation trimmed its sales outlook for the next three years and announced plans to sell underperforming wine brands to the Wine Group for an undisclosed sum.
The shareholder allegations claim the company conspired to inflate its performance in the category ahead of the sale.
The lawsuit alleges that, before the sale, Constellation misled investors with earnings statements that suggested the company’s wine holdings were set for growth.
CEO Bill Newlands told investors in an earnings call in April 2024 that it was working to boost the price mix and media spending on its wine brands, which the lawsuit claims was “materially false and misleading.”
