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

                                    FORM 10-K
(Mark One)

[X]  ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE
     ACT OF 1934
For the fiscal year ended February 28, 2001
                          -----------------

                                       OR

[ ]  TRANSITION  REPORT  PURSUANT  TO  SECTION  13  OR  15(d) OF THE  SECURITIES
     EXCHANGE ACT OF 1934
For the transition period from               to
                               -------------    -------------


                          Commission File No. 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            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           (I.R.S. Employer
jurisdiction of       specified in its charter)              Identification No.)
incorporation or
organization)

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

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

<PAGE>



          SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

      Title of each class              Name of each exchange on which registered
      -------------------              -----------------------------------------
      Class A Common Stock                      New York Stock Exchange
        (par value $.01 per share)
      Class B Common Stock                      New York Stock Exchange
        (par value $.01 per share)


          SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                                      None

Indicate  by check mark  whether  the  Registrants  (1) have  filed all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
Registrants  were required to file such  reports),  and (2) have been subject to
such filing requirements for the past 90 days.  Yes X    No
                                                   ---     ---

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of Registrants'  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

The  aggregate  market  value of the  common  stock  held by  non-affiliates  of
Constellation Brands, Inc., as of May 15, 2001, was $1,148,305,442.

The number of shares  outstanding  with respect to each of the classes of common
stock of Constellation Brands, Inc., as of May 15, 2001, is set forth below (all
of the  Registrants,  other  than  Constellation  Brands,  Inc.,  are  direct or
indirect wholly-owned subsidiaries of Constellation Brands, Inc.):

                  Class                             Number of Shares Outstanding
                  -----                             ----------------------------
Class A Common Stock, par value $.01 per share                35,831,754
Class B Common Stock, par value $.01 per share                 6,137,670



                       DOCUMENTS INCORPORATED BY REFERENCE

The proxy statement of  Constellation  Brands,  Inc. to be issued for the annual
meeting of stockholders to be held July 17, 2001 is incorporated by reference in
Part III.

================================================================================

<PAGE>
                                      - 1 -

                                     PART I

ITEM 1.  BUSINESS
-------  --------

     Unless  the  context  otherwise  requires,  the term  "Company"  refers  to
Constellation  Brands,  Inc. and its  subsidiaries,  and all  references to "net
sales" refer to gross  revenue less excise taxes and returns and  allowances  to
conform with the Company's method of  classification.  All references to "Fiscal
2001",  "Fiscal 2000" and "Fiscal 1999" shall refer to the Company's fiscal year
ended the last day of February of the indicated year.

     During Fiscal 2001, the Company changed its name from  Canandaigua  Brands,
Inc. to  Constellation  Brands,  Inc. The new name better reflects the Company's
dynamic  growth,  promising  potential  and  diversified  portfolio  as  well as
provides a clear  distinction  between the  corporate  parent and its  operating
divisions.

     Market share and industry data disclosed in this Annual Report on Form 10-K
have been obtained from the following industry and government publications:  The
Gomberg-Fredrikson  Report;  Adams Liquor Handbook;  Adams Wine Handbook;  Adams
Beer  Handbook;  Adams Media  Handbook  Advance;  The U.S.  Wine Market:  Impact
Databank Review and Forecast;  The U.S. Beer Market:  Impact Databank Review and
Forecast;  The U.S.  Distilled  Spirits  Markets:  Impact  Databank  Review  and
Forecast;  NACM; AC Nielsen; the Zenith Guide; Beer Marketer's Insights; and The
Drink  Pocketbook 2001. The Company has not  independently  verified these data.
Unless  otherwise  noted,  all references to market share data are based on unit
volume and unless  otherwise  noted,  the most  recent  complete  industry  data
available are for 1999.

     The Company is a leader in the production and marketing of beverage alcohol
brands in North America and the United Kingdom, and 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, the Company is the largest single-source  supplier of these products in
the United States.  In the United Kingdom,  the Company is a leading marketer of
wine and the second  largest  producer  and  marketer  of cider.  With its broad
product portfolio,  the Company believes it is distinctly  positioned to satisfy
an array of consumer preferences across all beverage alcohol categories. Leading
brands in the Company's  portfolio include:  Franciscan  Oakville Estate,  Simi,
Estancia,  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.

     The  Company's  products  are  distributed  by more  than  1,000  wholesale
distributors in North America.  In the United Kingdom,  the Company  distributes
its branded products and those of other companies to more than 16,500 customers.
The Company operates 29 production  facilities throughout the world. In addition
to producing and marketing its own brands,  the Company also purchases  products
for resale from other producers.

     The Company is a Delaware corporation  incorporated on December 4, 1972, as
the successor to a business  founded in 1945.  Since the  Company's  founding in
1945 as a producer and marketer of wine products,  the Company has grown through
a combination of internal growth and acquisitions. The Company's internal growth
has been  driven by  leveraging  the  Company's  existing  portfolio  of leading
brands, developing new products, new packaging and line extensions, and focusing
on the faster growing sectors of the beverage alcohol industry. The acquisitions
of the Corus  Assets (as defined  below),  the Turner Road  Vintners  Assets (as
defined below), Forth Wines Limited ("Forth Wines"),  Franciscan Vineyards, Inc.
("Franciscan Estates"),  Simi Winery, Inc. ("Simi"), the Black Velvet Assets (as
defined  below) and Matthew  Clark plc ("Matthew  Clark")  continued a series of
strategic acquisitions made since

<PAGE>
                                      - 2 -

1991 by which the Company has  broadened  its portfolio and increased its market
share, net sales and cash flow.

RECENT DEVELOPMENTS

     COMMON STOCK SPLIT

     On April 10,  2001,  the  Board of  Directors  of the  Company  approved  a
two-for-one  stock split of both the Company's  Class A Common Stock and Class B
Common Stock,  which was  distributed in the form of a stock dividend on May 14,
2001, to stockholders of record on April 30, 2001.  Pursuant to the terms of the
stock  dividend,  each holder of Class A Common Stock  received  one  additional
share of Class A stock for each share of Class A stock held,  and each holder of
Class B Common  Stock  received one  additional  share of Class B stock for each
share  of  Class B stock  held.  All  share  and per  share  amounts  have  been
retroactively restated to give effect to the common stock split.

     PENDING ACQUISITION OF RAVENSWOOD WINERY

     On April 10, 2001, the Company and Ravenswood Winery,  Inc.  ("Ravenswood")
announced that they entered into a merger agreement under which the Company will
acquire Ravenswood, a leading premium wine producer based in Sonoma, California.
Under the terms of the merger agreement, the Company will pay $29.50 in cash for
each outstanding share of Ravenswood,  or approximately $148 million, and assume
net debt,  which the Company  does not expect to be  significant  at the time of
closing.

     Ravenswood  produces,  markets and sells  super-premium  and  ultra-premium
California wines primarily under the Ravenswood brand name. The vast majority of
the wines Ravenswood produces and sells are red wines,  including the number one
super-premium  Zinfandel  in the United  States.  The Company  intends to manage
Ravenswood through its Franciscan segment.

     The proposed Ravenswood  acquisition is in line with the Company's strategy
of  further   penetrating  the  faster  growing,   higher  gross  profit  margin
super-premium and ultra-premium  wine categories.  The transaction is subject to
satisfaction  of customary  closing  conditions and is expected to close in late
June or early  July 2001.  The  Company  cannot  guarantee,  however,  that this
transaction will be completed upon the agreed upon terms, or at all.

     ACQUISITION OF THE CORUS ASSETS

     On March 26, 2001, in an asset  acquisition,  the Company  acquired certain
wine  brands,  wineries,  working  capital  (primarily  inventories),  and other
related  assets  from  Corus  Brands,   Inc.  (the  "Corus  Assets").   In  this
acquisition,  the  Company  acquired  several  well-known  premium  wine  brands
primarily sold in the northwestern United States, including Covey Run, Columbia,
Ste. Chapelle and Alice White. The purchase price of the Corus Assets, including
assumption  of  indebtedness,  was $52.0 million plus an earn-out over six years
based on the performance of the brands. In connection with the transaction,  the
Company also entered into long-term  grape supply  agreements with affiliates of
Corus  Brands,  Inc.  covering  more than 1,000  acres of  Washington  and Idaho
vineyards.

     ACQUISITION OF THE TURNER ROAD VINTNERS ASSETS

     On March 5, 2001, in an asset  acquisition,  the Company  acquired  several
well-known premium wine brands,  including Vendange,  Nathanson Creek, Heritage,
and Talus, working capital (primarily inventories),  two wineries in California,
and other related  assets from  Sebastiani  Vineyards,  Inc. and Tuolomne  River
Vintners  Group (the "Turner Road Vintners  Assets").  The purchase price of the
Turner Road Vintners Assets,  including  assumption of indebtedness,  was $289.7
million.

<PAGE>
                                      - 3 -

     The  acquisition  of the Corus Assets,  along with the  acquisition  of the
Turner Road Vintners Assets,  has  strengthened  the Company's  portfolio in the
higher margin and growing premium table wine category.  The acquired  operations
are being integrated into the Company's Canandaigua Wine segment.

ACQUISITIONS IN FISCAL 2001, FISCAL 2000 AND FISCAL 1999

     ACQUISITION OF FORTH WINES

     On October 27, 2000, Matthew Clark acquired all of the outstanding stock of
Forth Wines, a wine and spirit wholesaler  operating primarily in Scotland.  The
purchase  price of the shares was $4.5  million.  The  addition  of Forth  Wines
further  strengthened  Matthew Clark's  position as one of the United  Kingdom's
leading drinks wholesalers,  and made Matthew Clark the leading provider of wine
to the on-premise market in Scotland.

     ACQUISITIONS OF FRANCISCAN ESTATES AND SIMI

     On June 4, 1999, the Company purchased all of the outstanding capital stock
of  Franciscan  Estates  and,  in  related  transactions,  purchased  vineyards,
equipment  and other  vineyard  related  assets  located in Northern  California
(collectively the "Franciscan  Acquisition").  The purchase price of the shares,
including  the  assumption of  indebtedness,  net of cash  acquired,  was $243.2
million.   Franciscan   Estates  is  one  of  the  foremost   super-premium  and
ultra-premium wine companies in California.

     Also on June 4, 1999, the Company purchased all of the outstanding  capital
stock  of Simi.  (The  acquisition  of the  capital  stock of Simi is  hereafter
referred to as the "Simi  Acquisition".)  The  purchase  price of the shares was
$57.5  million.  The Simi  Acquisition  included  the Simi  winery  (located  in
Healdsburg, California), equipment, vineyards, inventory and worldwide ownership
of the Simi  brand  name.  Founded  in 1876,  Simi is one of the oldest and best
known wineries in California, combining a strong super-premium and ultra-premium
brand with a flexible and  well-equipped  facility and high quality vineyards in
the key  Sonoma  appellation.  On  February  29,  2000,  Simi  was  merged  into
Franciscan Estates.

     The  Franciscan and Simi  Acquisitions  have  established  the Company as a
leading producer and marketer of super-premium and ultra-premium wine. Together,
Franciscan  Estates  and Simi  represent  one of the largest  super-premium  and
ultra-premium  wine  companies  in  the  United  States.  The  Company  operates
Franciscan  Estates  and Simi,  and their  properties,  together  as a  separate
business segment (collectively, "Franciscan").

     ACQUISITION OF THE BLACK VELVET ASSETS

     On April 9, 1999, in an asset  acquisition,  the Company  acquired  several
well-known  Canadian  whisky  brands,  including  Black  Velvet,  the third best
selling Canadian whisky and the 16th best selling distilled spirits brand in the
United States, production facilities located in Alberta and Quebec, Canada, case
goods and bulk whisky  inventories  and other related assets from  affiliates of
Diageo plc  (collectively,  the "Black Velvet  Assets").  Other principal brands
acquired in the transaction were Golden Wedding,  OFC,  MacNaughton,  McMaster's
and Triple Crown. In connection with the  transaction,  the Company also entered
into multi-year  agreements  with affiliates of Diageo plc to provide  packaging
and  distilling   services  for  various  brands  retained  by  the  Diageo  plc
affiliates. The purchase price of the Black Velvet Assets was $183.6 million.

     The  addition  of  the  Canadian   whisky  brands  from  this   transaction
strengthened  the Company's  position in the North  American  distilled  spirits
category,   and  enhanced  the  Company's   portfolio  of  brands

<PAGE>
                                      - 4 -

and category  participation.  The acquired  operations have been integrated into
the Company's Barton segment.

     ACQUISITION OF MATTHEW CLARK

     On December 1, 1998, the Company  acquired  control of Matthew Clark and as
of February 28, 1999,  had acquired all of Matthew  Clark's  outstanding  shares
(the "Matthew Clark Acquisition").  The purchase price of the shares,  including
the  assumption  of  indebtedness,  net of cash  acquired,  was $484.8  million.
Matthew Clark has a number of leading market positions,  including  positions as
the number one  producer of branded  wine,  the number one  branded  producer of
fortified  British  wine,  the number two producer of cider,  a leading  branded
bottler of sparkling water and the leading  independent  beverage  wholesaler to
the on-premise trade.

     The  Matthew  Clark  Acquisition  has given the  Company a presence  in the
United Kingdom and a platform for growth in the European market. The acquisition
of  Matthew  Clark  also  offers  potential  benefits   including   distribution
opportunities to market  California-produced  wine and  U.S.-produced  distilled
spirits in the United Kingdom,  as well as the potential to market Matthew Clark
products in the United States.

     Through  these  and  prior  acquisitions,   the  Company  has  become  more
competitive by:  diversifying its portfolio;  developing strong market positions
in the growing  beverage  alcohol product  categories of varietal table wine and
imported beer;  strengthening its relationships with wholesalers;  expanding its
distribution and enhancing its production capabilities; and acquiring additional
management, operational, marketing, and research and development expertise.

BUSINESS SEGMENTS

     The Company  operates  primarily in the beverage  alcohol industry in North
America and the United  Kingdom.  The Company  reports its operating  results in
five segments:  Canandaigua Wine (branded  popular premium wine and brandy,  and
other, primarily grape juice concentrate);  Barton (primarily beer and distilled
spirits);  Matthew Clark (branded wine,  cider and bottled water,  and wholesale
wine, cider,  distilled spirits,  beer and soft drinks);  Franciscan  (primarily
branded super-premium and ultra-premium wine) and Corporate Operations and Other
(primarily corporate related items).

     Information regarding net sales,  operating income and total assets of each
of the Company's business segments and information regarding geographic areas is
set forth in Note 15 to the Company's  consolidated financial statements located
in Item 8 of this Annual Report on Form 10-K.

     CANANDAIGUA WINE

     Canandaigua Wine produces,  bottles, imports and markets wine and brandy in
the United  States.  It is the  second  largest  supplier  of wine in the United
States and exports wine to  approximately  60 countries  from the United States.
Canandaigua Wine sells table wine, dessert wine,  sparkling wine and brandy. Its
leading brands include Alice White,  Almaden,  Arbor Mist, Covey Run, Dunnewood,
Estate  Cellars,  Inglenook,  Manischewitz,  Marcus James,  Mystic Cliffs,  Paul
Masson, Talus, Taylor, Vendange, Vina Santa Carolina, Cook's, J. Roget, Richards
Wild Irish  Rose,  and Paul  Masson  Grande  Amber  Brandy.  Most of its wine is
marketed in the $4.00 to $10.00 per 750 ml bottle price range.

     As a related part of its U.S. wine business,  Canandaigua Wine is a leading
grape juice concentrate  producer in the United States.  Grape juice concentrate
competes with other domestically produced and imported fruit-based concentrates.
Canandaigua Wine's other  wine-related  products and services include

<PAGE>
                                      - 5 -

bulk wine,  cooking wine,  grape juice and St. Regis,  a leading  de-alcoholized
line of wine in the United States.

     BARTON

     Barton  produces,  bottles,  imports and markets a diversified line of beer
and distilled spirits. It is the second largest marketer of imported beer in the
United  States and  distributes  six of the top 25  imported  beer brands in the
United States: Corona Extra, Modelo Especial,  Corona Light, Pacifico, St. Pauli
Girl,  and Negra Modelo.  Corona Extra is the best selling  imported beer in the
United States.  Barton's other imported beer brands include Tsingtao from China,
Peroni from Italy and Double  Diamond and  Tetley's  English Ale from the United
Kingdom.  Barton also  operates the Stevens  Point  Brewery,  a regional  brewer
located in Wisconsin, which produces Point Special, among other brands.

     Barton is the fourth  largest  supplier of distilled  spirits in the United
States and exports  distilled  spirits to  approximately  25 countries  from the
United States. Barton's principal distilled spirits brands include Black Velvet,
Fleischmann's, Mr. Boston, Canadian LTD, Chi-Chi's prepared cocktails, Ten High,
Montezuma,  Barton,  Monte Alban and Inver House.  Substantially all of Barton's
distilled  spirits  unit volume  consists of products  marketed in the value and
mid-premium  priced  category.  Barton also sells distilled  spirits in bulk and
provides contract production and bottling services for third parties.

     MATTHEW CLARK

     Matthew Clark is a leading producer and marketer of cider, wine and bottled
water and a leading drinks  wholesaler  throughout the United  Kingdom.  Matthew
Clark also exports its branded  products to  approximately 50 countries from the
United  Kingdom.  Matthew Clark is the second  largest  producer and marketer of
cider in the United Kingdom.  Matthew Clark distributes its cider brands in both
the on-premise and  off-premise.  Matthew  Clark's  leading cider brands include
Blackthorn,  the number two cider  brand in the United  Kingdom,  Gaymer's  Olde
English,  the United  Kingdom's  second  largest  cider  brand in the  take-home
market, Diamond White and K.

     Matthew Clark's Stowells of Chelsea brand is the best selling branded table
wine in the United Kingdom. Matthew Clark is the largest supplier of wine to the
on-premise  trade in the United  Kingdom and  maintains a leading  market  share
position in fortified  British wine through its QC and Stone's  brand names.  It
also produces and markets  Strathmore  bottled water in the United Kingdom,  the
fourth largest  bottled water brand and a leading  sparkling  water brand in the
country.

     Matthew  Clark  is  the  leading  independent  beverage  wholesaler  to the
on-premise trade in the United Kingdom and has one of the largest customer bases
in the  United  Kingdom,  with more than  16,000  on-premise  accounts.  Matthew
Clark's  wholesaling   business  involves  the  distribution  of  branded  wine,
distilled  spirits,  cider,  beer and soft  drinks.  While  these  products  are
primarily  produced by third parties,  they also include Matthew Clark's branded
cider and wine products.

     FRANCISCAN

     The Company's Franciscan segment is a major player in the super-premium and
ultra-premium  wine market.  The  Franciscan  segment  includes the  prestigious
Franciscan Oakville Estate (in Napa Valley,  California),  Estancia (in Monterey
and Sonoma, California),  Simi (in Sonoma, California), Mt. Veeder and Quintessa
(in Napa Valley,  California),  and Veramonte (in the Casablanca Valley,  Chile)
wines.  The  portfolio of fine wines is supported by the  division's  winery and
vineyard  holdings  in  California  and Chile.  These  brands are  marketed by a
dedicated sales force,  primarily focusing on high-end restaurants and fine wine
shops.  Franciscan also exports its products to  approximately 20 countries from
the United States.

<PAGE>
                                      - 6 -

     CORPORATE OPERATIONS AND OTHER

     Corporate Operations and Other includes traditional corporate related items
and the results of an immaterial operation.

MARKETING AND DISTRIBUTION

     NORTH AMERICA

     The Company's  products are distributed  and sold throughout  North America
through  over  1,000  wholesalers,  as  well as  through  state  and  provincial
alcoholic  beverage control  agencies.  Canandaigua  Wine, Barton and Franciscan
employ full-time,  in-house marketing,  sales and customer service organizations
to develop and service their sales to wholesalers and state agencies.

     The Company believes that the organization of its sales force into separate
segments  positions  it to  maintain  a high  degree  of  focus  on  each of its
principal product categories.  However, where appropriate, the Company leverages
its sales and marketing skills across the organization, particularly in national
accounts.

     The Company's  marketing  strategy places primary emphasis upon promotional
programs  directed  at  its  broad  national  distribution  network,  and at the
retailers served by that network.  The Company has extensive  marketing programs
for its brands  including  promotional  programs  on both a  national  basis and
regional  basis in  accordance  with the  strength of the brands,  point-of-sale
materials, consumer media advertising, event sponsorship, market research, trade
advertising and public relations.

     UNITED KINGDOM

     The Company's U.K.-produced branded products are distributed throughout the
United  Kingdom by Matthew  Clark.  The  products  are  packaged at one of three
production  facilities.  Shipments  of cider and wine are then  made to  Matthew
Clark's national distribution center for branded products.  All branded products
are then  distributed to either the on-premise or off-premise  markets with some
of the sales to on-premise  customers  made through  Matthew  Clark's  wholesale
business.  Matthew Clark's wholesale products are distributed  through 11 depots
located throughout the United Kingdom.  On-premise distribution channels include
hotels,  restaurants,  pubs, wine bars and clubs.  The off-premise  distribution
channels include grocers, convenience retail and cash-and-carry outlets.

     Matthew   Clark   employs  a  full-time,   in-house   marketing  and  sales
organization  that targets  off-premise  customers for Matthew  Clark's  branded
products.  Matthew  Clark also employs a full-time,  in-house  branded  products
marketing and sales  organization  that  services  specifically  the  on-premise
market in the United Kingdom.  Additionally,  Matthew Clark employs a full-time,
in-house  marketing  and sales  organization  to service  the  customers  of its
wholesale business.

TRADEMARKS AND DISTRIBUTION AGREEMENTS

     The Company's products are sold under a number of trademarks, most of which
are owned by the Company. The Company also produces and sells wine and distilled
spirits products under exclusive license or distribution  agreements.  Important
agreements include a long-term license agreement with Hiram Walker & Sons, Inc.,
which expires in 2116,  for the Ten High,  Crystal  Palace,  Northern  Light and
Imperial  Spirits  brands;  and  a  long-term  license  agreement  with  the  B.
Manischewitz  Company,  which  expires in 2042,  for the  Manischewitz  brand of
kosher  wine.  On  September  30,  1998,  under the  provisions  of an  existing
long-term license agreement, Nabisco Brands Company agreed to transfer to

<PAGE>
                                      - 7 -

Barton all of its right,  title and interest to the corporate name  "Fleischmann
Distilling Company" and worldwide trademark rights to the "Fleischmann" mark for
alcoholic beverages. Pending the completion of the assignment of such interests,
the license will remain in effect.  The Company also has other less  significant
license and  distribution  agreements  related to the sale of wine and distilled
spirits with terms of various durations.

     All of the Company's  imported beer products are marketed and sold pursuant
to exclusive distribution agreements with the suppliers of these products. These
agreements  have terms that vary and prohibit us from importing  other beer from
other  producers  from the same country.  The Company's  agreement to distribute
Corona Extra and other Mexican beer brands  exclusively  throughout 25 primarily
western U.S.  states  expires in December 2006 and,  subject to compliance  with
certain performance  criteria,  continued retention of certain Company personnel
and  other  terms  under  the  agreement,  will  be  automatically  renewed  for
additional  terms of five  years.  Changes in  control of the  Company or of its
subsidiaries  involved in  importing  the Mexican  beer  brands,  changes in the
position of the Chief  Executive  Officer of Barton  Beers,  Ltd.,  including by
death or disability, or the termination of the President of Barton Incorporated,
may be a basis  for the  supplier,  unless  it  consents  to  such  changes,  to
terminate  the  agreement.  The  supplier's  consent to such  changes may not be
unreasonably  withheld. The Company's agreement for the importation of St. Pauli
Girl expires in June 2003.  Prior to their  expiration,  these agreements may be
terminated  if the  Company  fails to meet  certain  performance  criteria.  The
Company  believes it is currently in compliance with its material  imported beer
distribution  agreements.  From time to time, the Company has failed, and may in
the future fail, to satisfy  certain  performance  criteria in its  distribution
agreements.  Although  there  can  be  no  assurance  that  the  Company's  beer
distribution   agreements  will  be  renewed,   given  the  Company's  long-term
relationships with its suppliers,  the Company expects that such agreements will
be renewed prior to their  expiration and does not believe that these agreements
will be terminated.

     The Company owns the  trademarks  for most of the brands that were acquired
in the Matthew  Clark  acquisition.  The  Company  has a series of  distribution
agreements and supply  agreements in the United  Kingdom  related to the sale of
its products with varying terms and durations.

COMPETITION

     The beverage alcohol industry is highly  competitive.  The Company competes
on the  basis  of  quality,  price,  brand  recognition  and  distribution.  The
Company's   beverage   alcohol   products   compete  with  other  alcoholic  and
nonalcoholic beverages for consumer purchases,  as well as shelf space in retail
stores,  a  presence  in  restaurants  and  marketing  focus  by  the  Company's
wholesalers.  The Company  competes  with numerous  multinational  producers and
distributors  of  beverage  alcohol  products,  some of which  may have  greater
resources than the Company.  In the United States,  Canandaigua Wine's principal
competitors  include E & J Gallo Winery and The Wine Group.  Barton's  principal
competitors  include Heineken USA, Molson Breweries USA,  Labatt's USA, Guinness
Import  Company,  Brown-Forman  Beverages,  Jim  Beam  Brands  and  Heaven  Hill
Distilleries,  Inc.  Franciscan's  principal competitors include Beringer Blass,
Robert  Mondavi  Corp.,  and  Kendall-Jackson.  In the United  Kingdom,  Matthew
Clark's principal competitors include H.P. Bulmer,  Halewood Vintners,  Waverley
Vintners and Perrier. In connection with its wholesale  business,  Matthew Clark
distributes the branded wine of third parties that compete  directly against its
own wine brands.

PRODUCTION

     In the United States, the Company's wine is produced from several varieties
of wine grapes grown  principally  in  California  and New York.  The grapes are
crushed  at  the  Company's   wineries  and  stored  as  wine,  grape  juice  or
concentrate.  Such  grape  products  may be made  into  wine for sale  under the
Company's  brand  names,  sold to other  companies  for resale  under  their own
labels,  or  shipped  to

<PAGE>
                                      - 8 -

customers in the form of juice, juice concentrate,  unfinished wine,  high-proof
grape spirits or brandy.  Most of the Company's  wine is bottled and sold within
18 months after the grape crush. The Company's  inventories of wine, grape juice
and  concentrate  are usually at their  highest  levels in November and December
immediately after the crush of each year's grape harvest,  and are substantially
reduced prior to the subsequent year's crush.

     The bourbon whiskeys, domestic blended whiskeys and light whiskeys marketed
by the Company are primarily  produced and aged by the Company at its distillery
in  Bardstown,  Kentucky.  Following the Black Velvet  Assets  acquisition,  the
majority of the Company's Canadian whisky  requirements are produced and aged at
its Canadian  distilleries in Lethbridge,  Alberta, and Valleyfield,  Quebec. At
its Albany,  Georgia,  facility,  the Company  produces all of the neutral grain
spirits and whiskeys it uses in the production of vodka, gin and blended whiskey
it sells to customers in the state of Georgia.  The  Company's  requirements  of
Scotch  whisky,  tequila,  mezcal and the neutral  grain  spirits it uses in the
production  of gin and vodka for sale  outside  of  Georgia,  and other  spirits
products, are purchased from various suppliers.

     The Company  operates three  facilities in the United Kingdom that produce,
bottle and package cider,  wine and water. To produce Stowells of Chelsea,  wine
is imported  in bulk from  various  countries  such as Chile,  Germany,  France,
Spain,  South  Africa and  Australia,  which is then  packaged at the  Company's
facility at Bristol and  distributed  under the Stowells of Chelsea  brand name.
Cider production was  consolidated at the Company's  facility at Shepton Mallet,
where apples of many  different  varieties are purchased  from U.K.  growers and
crushed. This juice, along with European-sourced  concentrate, is then fermented
into cider.  The Strathmore brand of bottled water (which is available in still,
sparkling, and flavored varieties) is sourced and bottled in Forfar, Scotland.

     The Company  operates one winery in Chile that crushes,  vinifies,  cellars
and bottles wine.

SOURCES AND AVAILABILITY OF RAW MATERIALS

     The  principal  components  in  the  production  of the  Company's  branded
beverage  alcohol  products  are  packaging  materials   (primarily  glass)  and
agricultural products,  such as grapes and grain. The Company utilizes glass and
polyethylene  terephthalate  ("PET")  bottles and other  materials such as caps,
corks,  capsules,  labels and cardboard cartons in the bottling and packaging of
its  products.  Glass  bottle  costs are one of the  largest  components  of the
Company's cost of product sold. The glass bottle industry is highly concentrated
with only a small number of producers.  The Company has traditionally  obtained,
and  continues  to  obtain,  its glass  requirements  from a  limited  number of
producers.  The  Company  has  not  experienced  difficulty  in  satisfying  its
requirements  with respect to any of the  foregoing and considers its sources of
supply to be adequate.  However,  the  inability of any of the  Company's  glass
bottle  suppliers to satisfy the Company's  requirements  could adversely affect
the Company's operations.

     Most of the Company's annual grape  requirements are satisfied by purchases
from each  year's  harvest  which  normally  begins in August  and runs  through
October.  The Company believes that it has adequate sources of grape supplies to
meet its sales  expectations.  However,  in the event  demand for  certain  wine
products exceeds expectations, the Company could experience shortages.

     The Company purchases grapes from  approximately  800 independent  growers,
principally in the San Joaquin Valley and Monterey  regions of California and in
New York State.  The Company  enters into  written  purchase  agreements  with a
majority of these growers on a year-to-year basis. The Company currently owns or
leases approximately 8,000 acres of land and vineyards,  either fully bearing or
under development, in California, New York and Chile. This acreage supplies only
a small  percentage  of the  Company's  total  needs.  The Company  continues to
consider the purchase or lease of additional vineyards,  and additional land for
vineyard plantings, to supplement its grape supply.

<PAGE>
                                      - 9 -

     The  distilled   spirits   manufactured  by  the  Company  require  various
agricultural  products,  neutral  grain  spirits and bulk  spirits.  The Company
fulfills  its  requirements  through  purchases  from  various  sources  through
contractual  arrangements and through purchases on the open market.  The Company
believes that adequate supplies of the aforementioned  products are available at
the present time.

     The Company  manufactures  cider,  perry,  light and fortified British wine
from  materials that are purchased  either on a contracted  basis or on the open
market.  In particular,  supplies of cider apples are sourced through  long-term
supply  arrangements with owners of apple orchards.  There are adequate supplies
of the various raw materials at this particular time.

GOVERNMENT REGULATION

     The  Company's  operations  in the United  States are subject to  extensive
federal and state  regulation.  These  regulations  cover,  among other matters,
sales  promotion,  advertising  and public  relations,  labeling and  packaging,
changes in officers or directors, ownership or control, distribution methods and
relationships,  and requirements regarding brand registration and the posting of
prices and price  changes.  All of the Company's  operations  and facilities are
also  subject  to  federal,  state,  foreign  and local  environmental  laws and
regulations  and the  Company is  required  to obtain  permits  and  licenses to
operate its facilities.

     In the United Kingdom, the Company has secured a Customs and Excise License
to carry on its excise trade.  Licenses are required for all premises where wine
is produced. The Company holds a license to act as an excise warehouse operator.
Registrations  have been secured for the  production of cider and bottled water.
Formal approval of product labeling is not required.

     In Canada,  the Company's  operations are also subject to extensive federal
and  provincial  regulation.  These  regulations  cover,  among  other  matters,
advertising and public relations, labeling and packaging,  environmental matters
and  customs  and duty  requirements.  The  Company is also  required  to obtain
licenses and permits to operate its facilities.

     The Company believes that it is in compliance in all material respects with
all  applicable   governmental  laws  and  regulations  and  that  the  cost  of
administration   and  compliance  with,  and  liability  under,  such  laws  and
regulations  does not have,  and is not  expected  to have,  a material  adverse
impact on the  Company's  financial  condition,  results of  operations  or cash
flows.

EMPLOYEES

     The Company  had  approximately  3,000  full-time  employees  in the United
States at the end of April  2001,  of which  approximately  830 were  covered by
collective  bargaining  agreements.  Additional  workers  may be employed by the
Company during the grape crushing season.

     The Company  had  approximately  1,770  full-time  employees  in the United
Kingdom at the end of April 2001,  of which  approximately  410 were  covered by
collective bargaining agreements.  Additional workers may be employed during the
peak season.

     The Company had approximately 220 full-time  employees in Canada at the end
of April 2001, of which approximately 160 were covered by collective  bargaining
agreements.

     The Company considers its employee relations generally to be good.

<PAGE>
                                     - 10 -

                INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

     This  Annual  Report on Form  10-K  contains  "forward-looking  statements"
within the meaning of Section 27A of the  Securities Act of 1933 and Section 21E
of the Securities  Exchange Act of 1934.  These  forward-looking  statements are
subject  to a number of risks and  uncertainties,  many of which are  beyond the
Company's  control,  that could cause actual results to differ  materially  from
those  set forth  in,  or  implied  by,  such  forward-looking  statements.  All
statements  other than  statements of historical  facts  included in this Annual
Report on Form 10-K,  including the statements  under this Item 1 "Business" and
Item 7 "Management's  Discussion and Analysis of Financial Condition and Results
of  Operations"  regarding our business  strategy,  future  financial  position,
prospects, plans and objectives of management, as well as information concerning
expected  actions  of  third  parties  are   forward-looking   statements.   All
forward-looking  statements  speak only as of the date of this Annual  Report on
Form  10-K.  The  Company  undertakes  no  obligation  to update  or revise  any
forward-looking  statements,  whether  as a result  of new  information,  future
events  or  otherwise.  Although  the  Company  believes  that the  expectations
reflected  in the  forward-looking  statements  are  reasonable,  it can give no
assurance that such  expectations  will prove to be correct.  In addition to the
risks and uncertainties of ordinary business operations,  important factors that
could  cause  actual  results to differ  materially  from those set forth in, or
implied by the  Company's  forward-looking  statements  contained in this Annual
Report on Form 10-K are as follows:

COMPETITION COULD HAVE A MATERIAL ADVERSE EFFECT ON THE COMPANY'S BUSINESS.

     The Company is in a highly competitive  industry and the dollar amount, and
unit  volume,  of its sales could be  negatively  affected by its  inability  to
maintain or increase  prices,  changes in  geographic  or product mix, a general
decline  in  beverage  alcohol  consumption  or the  decision  of our  wholesale
customers,  retailers or consumers to purchase  competitive  products instead of
the Company's products.  Wholesaler,  retailer and consumer purchasing decisions
are  influenced  by,  among other  things,  the  perceived  absolute or relative
overall value of the  Company's  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, the  Company's  products.  The Company could
also  experience  higher  than  expected  selling,  general  and  administrative
expenses  if the  Company  finds it  necessary  to  increase  the  number of its
personnel or advertising or promotional expenditures to maintain its competitive
position or for other reasons.

INCREASE  IN EXCISE  TAXES AND  GOVERNMENT  RESTRICTIONS  COULD  HAVE A MATERIAL
ADVERSE EFFECT ON THE COMPANY'S BUSINESS.

     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 the Company's 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 U.S.
Bureau of Alcohol, Tobacco and Firearms and the 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
operations  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 the  Company's
financial condition or results of operations.

<PAGE>
                                     - 11 -

THE COMPANY RELIES ON THE PERFORMANCE OF WHOLESALE  DISTRIBUTORS FOR THE SUCCESS
OF ITS BUSINESS.

     In the  United  States,  the  Company  sells its  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 the Company's  major  wholesalers  or the Company's  inability to
collect  accounts   receivable  from  the  Company's  major   wholesalers  could
materially  and  adversely  affect  the  Company's  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 the Company's
products offer products which compete  directly with the Company's  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 the
Company's  competitors.  In the future, the Company's  wholesalers and retailers
may not continue to purchase  the  Company's  products or provide the  Company's
products with adequate levels of promotional support.

THE COMPANY'S  BUSINESS COULD BE ADVERSELY  AFFECTED BY A GENERAL DECLINE IN THE
CONSUMPTION OF PRODUCTS THE COMPANY SELLS.

     In the United States the overall per capita consumption of beverage alcohol
products by adults (ages 21 and over) has declined  substantially  over the past
20 years. These declines have been caused by a variety of factors including:

     -    increased concern 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 water products;

     -    the increased activity of anti-alcohol consumer groups; and

     -    increased federal and state excise taxes.

THE COMPANY  GENERALLY DOES NOT HAVE LONG-TERM  SUPPLY CONTRACTS AND THE COMPANY
IS SUBJECT  TO  SUBSTANTIAL  PRICE  FLUCTUATIONS  FOR  GRAPES AND  GRAPE-RELATED
MATERIALS; THE COMPANY HAS A LIMITED GROUP OF SUPPLIERS OF GLASS BOTTLES.

     The Company's  business is heavily  dependent upon raw  materials,  such as
grapes,  grape juice concentrate,  grains,  alcohol and packaging materials from
third-party  suppliers.  The  Company  could  experience  raw  material  supply,
production or shipment  difficulties  which could adversely affect the Company's
ability to supply goods to its customers.  The Company is also directly affected
by increases in the costs of such raw  materials.  In the past,  the Company has
experienced  dramatic  increases  in the cost of grapes.  Although  the  Company
believes it has  adequate  sources of grape  supplies,  in the event  demand for
certain  wine  products  exceeds  expectations,  the  Company  could  experience
shortages. In addition, one of the Company's 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 the  Company's  glass  bottle  suppliers  to  satisfy  its
requirements could adversely affect the Company's business.

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  or unstable  governments  or legal  systems or
intergovernmental

<PAGE>
                                     - 12 -

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.

THE COMPANY'S ACQUISITION STRATEGY MAY NOT BE SUCCESSFUL.

     The Company has recently made a number of acquisitions and anticipates that
it may, from time to time, acquire additional  businesses,  assets or securities
of companies  that the Company  believes  would provide a strategic fit with its
business.  Any  other  acquired  business  will need to be  integrated  with the
Company's existing  operations.  There can be no assurance that the Company will
effectively  assimilate the business or product offerings of acquired  companies
into  its  business  or  product  offerings.   Any  acquisitions  also  will  be
accompanied  by risks  such as  potential  exposure  to unknown  liabilities  of
acquired companies, the difficulty and expense of integrating the operations and
personnel of the acquired companies,  the potential  disruption to the Company's
business,  the diversion of management  time and  attention,  the  impairment of
relationships  with and the possible  loss of key employees and customers of the
acquired  business,   and  the  incurrence  of  amortization   expenses  if  any
acquisition is accounted for as a purchase.  The Company's failure to adequately
manage the risks  associated with any acquisition  could have a material adverse
effect on the Company's financial condition or results of operations.

THE TERMINATION OR NON-RENEWAL OF IMPORTED BEER  DISTRIBUTION  AGREEMENTS  COULD
HAVE A MATERIAL ADVERSE EFFECT ON THE COMPANY'S BUSINESS.

     All of the Company's  imported beer products are marketed and sold pursuant
to exclusive distribution  agreements with the suppliers of these products which
are subject to renewal from time to time. Our exclusive  agreement to distribute
Corona  Extra and our other  Mexican  beer brands in 25  primarily  western U.S.
states  expires  in  December  2006 and,  subject  to  compliance  with  certain
performance  criteria,  continued retention of certain personnel and other terms
of the agreement,  will be  automatically  renewed for additional  terms of five
years.  Changes in  control  of the  Company  or its  subsidiaries  involved  in
importing the Mexican beer brands,  or changes in the chief executive officer of
such subsidiaries,  may be a basis for the supplier,  unless it consents to such
changes, to terminate the agreement.  The supplier's consent to such changes may
not be unreasonably withheld. Prior to their expiration, these agreements may be
terminated  if the  Company  fails to meet  certain  performance  criteria.  The
Company  believes  that it is currently in  compliance  with all of its material
imported beer distribution agreements. From time to time the Company has failed,
and may in the future  fail,  to satisfy  certain  performance  criteria  in the
Company's  distribution  agreements.  It is  possible  that the  Company's  beer
distribution  agreements  may  not be  renewed  or may be  terminated  prior  to
expiration.

THE COMPANY'S INDEBTEDNESS COULD HAVE A MATERIAL ADVERSE EFFECT ON ITS FINANCIAL
HEALTH.

     The  Company  has  incurred   substantial   indebtedness   to  finance  its
acquisitions and may incur substantial additional  indebtedness in the future to
finance  further  acquisitions.  The Company's  ability to satisfy its financial
obligations under the Company's indebtedness  outstanding from time to time will
depend upon the  Company's  future  operating  performance,  which is subject to
prevailing economic conditions, levels of interest rates and financial, business
and other factors,  many of which are beyond the Company's  control.  Therefore,
there can be no assurance that the Company's cash flow from  operations  will be
sufficient to meet all of its debt service  requirements and to fund its capital
expenditure requirements.

     The  Company's  current and future debt service  obligations  and covenants
could have important consequences.  Such obligations and covenants,  include and
may include the following:

<PAGE>
                                     - 13 -

     -    the Company's  ability to obtain  financing for future working capital
          needs or acquisitions or other purposes may be limited;

     -    a significant  portion of the Company's cash flow from operations will
          be  dedicated  to  the  payment  of  principal  and  interest  on  its
          indebtedness, thereby reducing funds available for operations;

     -    the Company is subject to  restrictive  covenants that could limit its
          ability to conduct its business; and

     -    the Company may be more vulnerable to adverse economic conditions than
          less leveraged competitors and, thus, may be limited in its ability to
          withstand competitive pressures.

     The restrictive  covenants included in the Company's senior credit facility
and its indentures include,  among others,  those restricting  additional liens,
additional  borrowing,  the sale of assets,  changes of control,  the payment of
dividends,  transactions with affiliates,  the making of investments and certain
other fundamental changes. The senior credit facility also contains restrictions
on  acquisitions  and certain  financial  ratio tests  including a debt coverage
ratio,  a senior debt  coverage  ratio,  a fixed  charges  ratio and an interest
coverage ratio.  These restrictions could limit the Company's ability to conduct
business.  A failure  to comply  with the  obligations  contained  in the senior
credit facility or its indentures could result in an event of default under such
agreements,  which could  require the Company to  immediately  repay the related
debt and also debt under other agreements that may contain cross-acceleration or
cross-default provisions.

                      -------------------------------------


ITEM 2.  PROPERTIES
-------  ----------

     The Company  consists of four business  operating  segments.  Through these
business segments,  the Company currently operates wineries,  distilling plants,
bottling plants, a brewery, cider and water producing facilities,  most of which
include  warehousing and  distribution  facilities on the premises.  The Company
also operates  separate  distribution  centers under the Matthew Clark segment's
wholesaling  business.  The Company  believes that all of our  facilities are in
good  condition and working  order and have adequate  capacity to meet its needs
for the foreseeable future. The Company's corporate  headquarters are located in
offices leased in Fairport, New York.

     CANANDAIGUA WINE

     Canandaigua  Wine maintains its headquarters in owned and leased offices in
Canandaigua,  New York.  It  operates  three  wineries  in New York,  located in
Canandaigua,  Naples and Batavia; six wineries in California, located in Madera,
Gonzales, Lodi, Escalon, Fresno and Ukiah; three wineries in Washington, located
in Woodinville,  Sunnyside and Zillah; and one winery in Caldwell, Idaho. All of
the  facilities  in which  these  wineries  operate  are  owned,  except for the
wineries in Batavia,  New York;  Caldwell,  Idaho; and Woodinville,  Washington,
which are leased.  Canandaigua  Wine considers its principal  wineries to be the
Mission  Bell  winery  in  Madera,   California;   the  Canandaigua   winery  in
Canandaigua,   New  York;  and  the  Riverland  Vineyards  winery  in  Gonzales,
California.  The  Mission  Bell winery  crushes  grapes,  produces,  bottles and
distributes wine and produces grape juice  concentrate.  The Canandaigua  winery
crushes  grapes and  produces,  bottles  and  distributes  wine.  The  Riverland
Vineyards  winery crushes grapes and produces,  bottles and distributes wine for
Canandaigua Wine's account and, on a contractual basis, for third parties.

     Canandaigua  Wine  currently  owns or leases  approximately  4,200 acres of
vineyards,  either fully bearing or under  development,  in  California  and New
York.

<PAGE>
                                     - 14 -

     BARTON

     Barton maintains its  headquarters in leased offices in Chicago,  Illinois.
It owns and operates four distilling plants, two in the United States and two in
Canada. The two distilling plants in the United States are located in Bardstown,
Kentucky;  and Albany,  Georgia;  and the two distilling plants in Canada, which
were acquired in connection  with the Black Velvet  Acquisition,  are located in
Valleyfield,  Quebec;  and Lethbridge,  Alberta.  Barton considers its principal
distilling  plants  to  be  the  facilities  located  in  Bardstown,   Kentucky;
Valleyfield,  Quebec; and Lethbridge,  Alberta. The Bardstown facility distills,
bottles and warehouses distilled spirits products for Barton's account and, on a
contractual  basis,  for other  participants  in the industry.  The two Canadian
facilities  distill,  bottle and store Canadian whisky for Barton's own account,
and  distill  and/or  bottle and store  Canadian  whisky,  vodka,  rum,  gin and
liqueurs for third parties.

     In the United  States,  Barton also  operates a brewery and three  bottling
plants.  The brewery is located in Stevens  Point,  Wisconsin;  and the bottling
plants  are  located in  Atlanta,  Georgia;  Owensboro,  Kentucky;  and  Carson,
California.  All of these facilities are owned by Barton except for the bottling
plant in Carson, California, which is operated and leased through an arrangement
involving an ongoing  management  contract.  Barton considers the bottling plant
located  in  Owensboro,  Kentucky  to be one of its  principal  facilities.  The
Owensboro  facility  bottles  and  warehouses  distilled  spirits  products  for
Barton's account and is also utilized for contract bottling.

     MATTHEW CLARK

     Matthew  Clark  maintains  its  headquarters  in owned  offices in Bristol,
England.  It  currently  owns and operates  two  facilities  in England that are
located in Bristol and Shepton  Mallet and one facility in Scotland,  located in
Forfar.  Matthew  Clark  considers  all  three  facilities  to be its  principal
facilities.  The Bristol  facility  produces,  bottles and  packages  wine;  the
Shepton Mallet facility  produces,  bottles and packages  cider;  and the Forfar
facility produces,  bottles and packages water products. Matthew Clark also owns
another  facility in England,  located in Taunton,  the operations of which have
now been consolidated  into its Shepton Mallet facility.  Matthew Clark plans to
sell the Taunton property.

     Matthew  Clark  operates  a  National   Distribution  Centre,   located  at
Severnside,  England to distribute its products that are produced at the Bristol
and Shepton Mallet facilities.  This distribution  facility is leased by Matthew
Clark.  To  support  its  wholesaling   business,   Matthew  Clark  operates  11
distribution  centers located  throughout the United  Kingdom,  all of which are
leased.  These 11 distribution  centers are used to distribute products produced
by third parties,  as well as by Matthew Clark.  Matthew Clark has been and will
continue consolidating the operations of its wholesaling distribution centers.

     FRANCISCAN

     Franciscan  maintains  its  headquarters  in offices  owned in  Rutherford,
California.  Through this segment the Company owns and operates four wineries in
the United States and, through a majority owned subsidiary,  operates one winery
in Chile.  All four  wineries  in the United  States are located in the state of
California, in Rutherford,  Healdsburg,  Monterey and Mt. Veeder, and the winery
in Chile is located in the Casablanca Valley. Franciscan considers its principal
wineries to be those located in Rutherford,  California; Healdsburg, California;
Monterey,  California;  and  the  Casablanca  Valley,  Chile.  The  wineries  in
Rutherford, California; Healdsburg, California; and the Casablanca Valley, Chile
crush grapes, vinify, cellar and bottle wine. The winery in Monterey, California
crushes, vinifies and cellars wine.

<PAGE>
                                     - 15 -

     Franciscan  also owns and leases  approximately  2,800  plantable  acres of
vineyards in California and approximately  1,000 plantable acres of vineyards in
Chile.


ITEM 3.  LEGAL PROCEEDINGS
-------  -----------------

     The Company and its  subsidiaries  are subject to  litigation  from time to
time in the ordinary  course of business.  Although the amount of any  liability
with  respect  to such  litigation  cannot  be  determined,  in the  opinion  of
management  such  liability  will  not have a  material  adverse  effect  on the
Company's financial condition, results of operations or cash flows.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
-------  --------------------------------------------------

     Not Applicable.


EXECUTIVE OFFICERS OF THE COMPANY

     Information with respect to the current  executive  officers of the Company
is as follows:

NAME                         AGE    OFFICE HELD
----                         ---    -----------
Richard Sands                50     Chairman of the Board, President and Chief
                                    Executive Officer
Robert Sands                 42     Group President
Peter Aikens                 62     President and Chief Executive Officer of
                                    Matthew Clark plc
Alexander L. Berk            51     President and Chief Executive Officer of
                                    Barton Incorporated
Agustin Francisco Huneeus    35     President of Franciscan Vineyards, Inc.
Jon Moramarco                44     President and Chief Executive Officer of
                                    Canandaigua Wine Company, Inc.
Thomas J. Mullin             49     Executive Vice President and General Counsel
George H. Murray             54     Executive Vice President and Chief Human
                                    Resources Officer
Thomas S. Summer             47     Executive Vice President and Chief Financial
                                    Officer


     Richard  Sands,  Ph.D.,  has  been  employed  by  the  Company  in  various
capacities since 1979. He was elected Executive Vice President and a director in
1982,  became President and Chief Operating  Officer in May 1986 and was elected
Chief  Executive  Officer in October  1993.  In  September  1999,  Mr. Sands was
elected Chairman of the Board. He is the brother of Robert Sands.

     Robert Sands was appointed  Group President in April 2000 and has served as
a director  since January 1990. Mr. Sands also had served as Vice President from
June 1990 through  October 1993, as Executive  Vice  President from October 1993
through April 2000,  and as General  Counsel from June 1986 through May 2000. He
is the brother of Richard Sands.

     Peter Aikens  serves as President  and Chief  Executive  Officer of Matthew
Clark plc, a wholly owned  subsidiary  of the  Company.  In this  capacity,  Mr.
Aikens is in charge of the Company's  Matthew Clark segment,  and has been since
the Company  acquired control of Matthew Clark in December 1998. He has been the
Chief Executive  Officer of Matthew Clark plc since May 1990 and has been in the
brewing and drinks industry for most of his career.

     Alexander L. Berk serves as President and Chief Executive Officer of Barton
Incorporated,  a wholly owned subsidiary of the Company.  In this capacity,  Mr.
Berk is in charge of the  Company's

<PAGE>
                                     - 16 -

Barton segment.  From 1990 until February 1998, Mr. Berk was President and Chief
Operating  Officer of Barton  and from 1988 to 1990,  he was the  President  and
Chief  Executive  Officer  of  Schenley  Industries.  Mr.  Berk  has been in the
beverage alcohol industry for most of his career, serving in various positions.

     Agustin  Francisco  Huneeus  serves as President of  Franciscan  Vineyards,
Inc., a wholly owned subsidiary of the Company. In this capacity, Mr. Huneeus is
in charge of the Company's Franciscan segment.  Since December 1995 and prior to
becoming  President  on May 15,  2000,  he  served  in  various  positions  with
Franciscan,  the last of which was Senior Vice  President,  Sales and Marketing.
From June 1994 to December  1995,  he was an associate  in the branded  consumer
venture group of Hambrecht & Quist.

     Jon  Moramarco  joined  Canandaigua  Wine  Company,  Inc.,  a wholly  owned
subsidiary of the Company, in November 1999 as its President and Chief Executive
Officer.  In  this  capacity,  Mr.  Moramarco  is in  charge  of  the  Company's
Canandaigua Wine segment.  Prior to joining  Canandaigua Wine Company,  Inc., he
served as President and Chief  Executive  Officer of Allied  Domecq  Wines,  USA
since 1992.  Mr.  Moramarco has more than 15 years of diverse  experience in the
wine  industry,  including  prior  service as Chairman of the American  Vintners
Association, a national wine trade organization.

     Thomas J. Mullin joined the Company as Executive Vice President and General
Counsel on May 30, 2000.  Prior to joining the  Company,  Mr.  Mullin  served as
President and Chief Executive  Officer of TD Waterhouse  Bank, NA since February
2000, of CT USA,  F.S.B.  since  September 1998, and of CT USA, Inc. since March
1997.  He also served as Executive  Vice  President,  Business  Development  and
Corporate  Strategy of C.T.  Financial  Services,  Inc.  from March 1997 through
February  2000.  From 1985 through 1997,  Mr. Mullin served as Vice Chairman and
Senior Executive Vice President of First Federal Savings and Loan Association of
Rochester, New York and from 1982 through 1985, he was a partner in the law firm
of Phillips, Lytle, Hitchcock, Blaine & Huber.

     George H. Murray joined the Company in April 1997 as Senior Vice  President
and Chief Human Resources  Officer and in April 2000 was elected  Executive Vice
President. From August 1994 to April 1997, Mr. Murray served as Vice President -
Human Resources and Corporate Communications of ACC Corp., an international long
distance  reseller.  For  eight  and a half  years  prior to that,  he served in
various  senior  management  positions  with  First  Federal  Savings  and  Loan
Association  of  Rochester,  New York,  including  the  position  of Senior Vice
President of Human Resources and Marketing from 1991 to 1994.

     Thomas S. Summer joined the Company in April l997 as Senior Vice  President
and  Chief  Financial  Officer  and in April  2000 was  elected  Executive  Vice
President.  From  November  1991  to  April  1997,  Mr.  Summer  served  as Vice
President,  Treasurer of Cardinal  Health,  Inc., a large  national  health care
services company,  where he was responsible for directing  financing  strategies
and treasury  matters.  Prior to that,  from November 1987 to November 1991, Mr.
Summer held several positions in corporate  finance and  international  treasury
with PepsiCo, Inc.

     Executive officers of the Company hold office until the next Annual Meeting
of the Board of Directors and until their successors are chosen and qualify.

<PAGE>
                                     - 17 -

                                     PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
-------  -----------------------------------------------------------------
         MATTERS
         -------

     On September 19, 2000, when the Company  changed its name to  Constellation
Brands, Inc., the Company's Class A Common Stock (the "Class A Stock") and Class
B Common  Stock  (the  "Class B  Stock")  began  trading  on the New York  Stock
Exchange(R) ("NYSE") under the symbols STZ and STZ.B, respectively. From October
12, 1999, to September 18, 2000,  the Company's  Class A Stock and Class B Stock
traded on the NYSE  under the  symbols  CDB and  CDB.B,  respectively.  Prior to
October 12, 1999,  the  Company's  Class A Stock and Class B Stock traded on the
Nasdaq  Stock   Market(R)   ("NASDAQ")   under  the  symbols  CBRNA  and  CBRNB,
respectively.  (The Company  delisted  voluntarily its securities from NASDAQ in
order to list its Class A Stock and Class B Stock on the NYSE.)

     The following  tables set forth for the periods  indicated the high and low
sales  prices of the Class A Stock and the Class B Stock,  as  adjusted  to give
retroactive effect to the May 14, 2001, two-for-one stock split. With respect to
the first two  quarters  of Fiscal  2000,  the high and low sales  prices of the
Class A Stock and the Class B Stock  reflect  trades on the NASDAQ.  For the 3rd
Quarter  of  Fiscal  2000,  the high and low  sales  prices of the Class A Stock
reflect  trades on the NASDAQ and the NYSE,  respectively,  and the high and low
sales  prices of the Class B Stock  reflect  trades on the  NASDAQ.  For the 4th
Quarter  of Fiscal  2000 and for all  periods of Fiscal  2001,  the high and low
sales prices of the Class A Stock and Class B Stock reflect trades on the NYSE.

                                    CLASS A STOCK
                 -----------------------------------------------------
                 1st Quarter   2nd Quarter   3rd Quarter   4th Quarter
                 -----------   -----------   -----------   -----------
Fiscal 2000
   High          $   27.63     $   30.19     $   30.59     $   27.34
   Low           $   22.69     $   21.44     $   26.50     $   23.38

Fiscal 2001
   High          $   27.88     $   27.78     $   29.22     $   34.30
   Low           $   20.19     $   21.91     $   22.94     $   23.50


                                    CLASS B STOCK
                 -----------------------------------------------------
                 1st Quarter   2nd Quarter   3rd Quarter   4th Quarter
                 -----------   -----------   -----------   -----------
Fiscal 2000
   High          $   26.50     $   30.00     $   30.38     $   28.88
   Low           $   23.75     $   22.13     $   28.00     $   24.50

Fiscal 2001
   High          $   27.00     $   27.50     $   28.06     $   33.50
   Low           $   21.25     $   24.13     $   24.00     $   24.50


     At May 15, 2001, the number of holders of record of Class A Stock and Class
B Stock of the Company were 961 and 263, respectively.

     The  Company's  policy is to retain  all of its  earnings  to  finance  the
development and expansion of its business, and the Company has not paid any cash
dividends since its initial public offering in 1973. In addition,  the Company's
current senior credit facility,  the Company's  indenture for its $130 million 8
3/4% Senior  Subordinated  Notes due December  2003,  its  indenture for its $65
million  8 3/4%  Series C Senior  Subordinated  Notes  due  December  2003,  its
indenture for its $200 million 8 1/2% Senior  Subordinated Notes due March 2009,
its  indenture  for its $200 million 8 5/8% Senior  Notes due August  2006,  its
indenture for its $200 million 8% Senior Notes due February  2008, its indenture
for its (pound)1  million 8 1/2% Series B Senior Notes due November 2009 and its
(pound)154  million 8 1/2% Series C Senior Notes due November  2009 restrict the
payment of cash dividends. On April 10, 2001, the Company's

<PAGE>
                                     - 18 -

Board of Directors  approved a two-for-one  split of both the Company's  Class A
Stock and Class B Stock,  which was  distributed in the form of a stock dividend
on May 14, 2001, to  stockholders of record on April 30, 2001. All share and per
share  amounts  have been  retroactively  restated  to give effect to the common
stock split.


ITEM 6.  SELECTED FINANCIAL DATA
-------  -----------------------
<TABLE>
<CAPTION>
                                        FOR THE          FOR THE                   FOR THE YEARS ENDED
                                       YEAR ENDED       YEAR ENDED                     FEBRUARY 28,
                                      FEBRUARY 28,     FEBRUARY 29,    -------------------------------------------
                                          2001             2000            1999            1998           1997
                                      ------------     ------------    ------------    ------------   ------------
(in thousands, except per share data)
<S>                                   <C>              <C>             <C>             <C>            <C>
Gross sales                           $  3,154,294     $  3,088,699    $  1,984,801    $  1,632,357   $  1,534,452
Less-excise taxes                         (757,609)        (748,230)       (487,458)       (419,569)      (399,439)
                                      ------------     ------------    ------------    ------------   ------------
  Net sales                              2,396,685        2,340,469       1,497,343       1,212,788      1,135,013
Cost of product sold                    (1,639,230)      (1,618,009)     (1,049,309)       (869,038)      (812,812)
                                      ------------     ------------    ------------    ------------   ------------
  Gross profit                             757,455          722,460         448,034         343,750        322,201
Selling, general and
  administrative expenses                 (486,587)        (481,909)       (299,526)       (231,680)      (208,991)
Nonrecurring charges                          -              (5,510)         (2,616)           -              -
                                      ------------     ------------    ------------    ------------   ------------
  Operating income                         270,868          235,041         145,892         112,070        113,210
Interest expense, net                     (108,631)        (106,082)        (41,462)        (32,189)       (34,050)
                                      ------------     ------------    ------------    ------------   ------------
  Income before taxes and
    extraordinary item                     162,237          128,959         104,430          79,881         79,160
Provision for income taxes                 (64,895)         (51,584)        (42,521)        (32,751)       (32,977)
                                      ------------     ------------    ------------    ------------   ------------
  Income before
    extraordinary item                      97,342           77,375          61,909          47,130         46,183
Extraordinary item, net of
  income taxes                                -                -            (11,437)           -              -
                                      ------------     ------------    ------------    ------------   ------------
Net income                            $     97,342     $     77,375    $     50,472    $     47,130   $     46,183
                                      ============     ============    ============    ============   ============

Earnings per common share:
  Basic:
    Income before
      extraordinary item              $       2.65     $       2.14    $       1.69    $       1.26           1.19
    Extraordinary item                        -                -              (0.31)           -              -
                                      ------------     ------------    ------------    ------------   ------------
    Earnings per common
      share - basic                   $       2.65     $       2.14    $       1.38    $       1.26   $       1.19
                                      ============     ============    ============    ============   ============
  Diluted:
    Income before
      extraordinary item              $       2.60     $       2.09    $       1.65    $       1.23   $       1.18
    Extraordinary item                        -                -              (0.30)           -              -
                                      ------------     ------------    ------------    ------------   ------------
    Earnings per common
      share - diluted                 $       2.60     $       2.09    $       1.35    $       1.23   $       1.18
                                      ============     ============    ============    ============   ============

Total assets                          $  2,512,169     $  2,348,791    $  1,793,776    $  1,090,555   $  1,043,281
                                      ============     ============    ============    ============   ============
Long-term debt                        $  1,307,437     $  1,237,135    $    831,689    $    309,218   $    338,884
                                      ============     ============    ============    ============   ============
</TABLE>

     For the fiscal year ended  February 28, 2001, and for the fiscal year ended
February  29,  2000,  see  Management's  Discussion  and  Analysis of  Financial
Condition and Results of  Operations  under Item 7 of this Annual Report on Form
10-K and Notes to  Consolidated  Financial  Statements  as of February 28, 2001,
under Item 8 of this Annual Report on Form 10-K.

     On April 10,  2001,  the  Board of  Directors  of the  Company  approved  a
two-for-one  stock split of both the Company's  Class A Common Stock and Class B
Common Stock, which was distributed in the

<PAGE>
                                     - 19 -

form of a stock dividend on May 14, 2001, to stockholders of record on April 30,
2001. All share and per share amounts have been  retroactively  restated to give
effect to the common stock split.


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
-------  -----------------------------------------------------------------------
         OF OPERATIONS
         -------------

INTRODUCTION
------------

     The Company is a leader in the production and marketing of beverage alcohol
brands in North America and the United Kingdom, and 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, the Company is the largest single-source  supplier of these products in
the United States.  In the United Kingdom,  the Company is a leading marketer of
wine and the second largest producer and marketer of cider.

     The Company  reports its operating  results in five  segments:  Canandaigua
Wine (branded popular premium wine and brandy, and other,  primarily grape juice
concentrate);  Barton  (primarily  beer and  distilled  spirits);  Matthew Clark
(branded wine,  cider, and bottled water, and wholesale wine,  cider,  distilled
spirits, beer and soft drinks);  Franciscan (primarily branded super-premium and
ultra-premium  wine); and Corporate  Operations and Other  (primarily  corporate
related items).

     The following  discussion and analysis  summarizes the significant  factors
affecting  (i)  consolidated  results of  operations of the Company for the year
ended February 28, 2001 ("Fiscal 2001"), compared to the year ended February 29,
2000 ("Fiscal  2000"),  and Fiscal 2000 compared to the year ended  February 28,
1999 ("Fiscal  1999"),  and (ii) financial  liquidity and capital  resources for
Fiscal 2001. This discussion and analysis should be read in conjunction with the
Company's consolidated financial statements and notes thereto included herein.

RECENT DEVELOPMENTS

     COMMON STOCK SPLIT

     On April 10,  2001,  the  Board of  Directors  of the  Company  approved  a
two-for-one  stock split of both the Company's  Class A Common Stock and Class B
Common Stock,  which was  distributed in the form of a stock dividend on May 14,
2001,  to  stockholders  of record on April  30,  2001.  All share and per share
amounts  have been  retroactively  restated to give  effect to the common  stock
split.

     PENDING ACQUISITION OF RAVENSWOOD WINERY

     On April 10, 2001, the Company and Ravenswood Winery,  Inc.  ("Ravenswood")
announced that they entered into a merger agreement under which the Company will
acquire Ravenswood, a leading premium wine producer based in Sonoma, California.
Under the terms of the merger agreement, the Company will pay $29.50 in cash for
each outstanding share of Ravenswood,  or approximately $148 million, and assume
net debt,  which the Company  does not expect to be  significant  at the time of
closing.

     Ravenswood  produces,  markets and sells  super-premium  and  ultra-premium
California wines primarily under the Ravenswood brand name. The vast majority of
the wines Ravenswood produces and sells are red wines,  including the number one
super-premium  Zinfandel  in the United  States.  The Company  intends to manage
Ravenswood through its Franciscan segment.

     The proposed Ravenswood  acquisition is in line with the Company's strategy
of  further   penetrating  the  faster  growing,   higher  gross  profit  margin
super-premium and ultra-premium wine

<PAGE>
                                     - 20 -

categories.  The  transaction is subject to  satisfaction  of customary  closing
conditions and is expected to close in late June or early July 2001. The Company
cannot  guarantee,  however,  that this  transaction  will be completed upon the
agreed upon terms, or at all.

     ACQUISITION OF THE CORUS ASSETS

     On March 26, 2001, in an asset  acquisition,  the Company  acquired certain
wine  brands,  wineries,  working  capital  (primarily  inventories),  and other
related  assets  from  Corus  Brands,   Inc.  (the  "Corus  Assets").   In  this
acquisition,  the  Company  acquired  several  well-known  premium  wine  brands
primarily sold in the northwestern United States, including Covey Run, Columbia,
Ste.  Chapelle and Alice White. In connection with the transaction,  the Company
also entered into long-term  grape supply  agreements  with  affiliates of Corus
Brands,  Inc.  covering more than 1,000 acres of Washington and Idaho vineyards.
The acquired operations are being integrated into the Company's Canandaigua Wine
segment.

     ACQUISITION OF THE TURNER ROAD VINTNERS ASSETS

     On March 5, 2001, in an asset  acquisition,  the Company  acquired  several
well-known premium wine brands,  including Vendange,  Nathanson Creek, Heritage,
and Talus, working capital (primarily inventories),  two wineries in California,
and other related  assets from  Sebastiani  Vineyards,  Inc. and Tuolomne  River
Vintners Group (the "Turner Road Vintners Assets").  The acquired operations are
being integrated into the Company's Canandaigua Wine segment. The acquisition of
the Turner Road Vintners  Assets is  significant  and the Company  expects it to
have a material impact on the Company's future results of operations.

ACQUISITIONS IN FISCAL 2001, FISCAL 2000 AND FISCAL 1999

     ACQUISITION OF FORTH WINES

     On October 27, 2000, Matthew Clark acquired all of the outstanding stock of
Forth Wines, a wine and spirit wholesaler  operating primarily in Scotland.  The
results of  operation  from the Forth  Wines  acquisition  are  reported  in the
Matthew  Clark  segment and have been  included in the  consolidated  results of
operations of the Company since the date of acquisition.

     ACQUISITIONS OF FRANCISCAN ESTATES AND SIMI

     On June 4, 1999, the Company purchased all of the outstanding capital stock
of  Franciscan  Estates  and,  in  related  transactions,  purchased  vineyards,
equipment  and other  vineyard  related  assets  located in Northern  California
(collectively the "Franciscan  Acquisition").  Also on June 4, 1999, the Company
purchased all of the outstanding  capital stock of Simi. (The acquisition of the
capital stock of Simi is hereafter  referred to as the "Simi  Acquisition".) The
Simi Acquisition  included the Simi winery (located in Healdsburg,  California),
equipment,  vineyards, inventory and worldwide ownership of the Simi brand name.
The  results  of  operations   from  the   Franciscan   and  Simi   Acquisitions
(collectively, "Franciscan") are reported together in the Franciscan segment and
have been included in the consolidated results of operation of the Company since
the date of  acquisition.  On February 29, 2000, Simi was merged into Franciscan
Estates.

<PAGE>
                                     - 21 -

     ACQUISITION OF THE BLACK VELVET ASSETS

     On April 9, 1999, in an asset  acquisition,  the Company  acquired  several
well-known Canadian whisky brands, including Black Velvet, production facilities
located in Alberta and Quebec,  Canada,  case goods and bulk whisky  inventories
and other related assets from affiliates of Diageo plc (collectively, the "Black
Velvet Assets").  In connection with the  transaction,  the Company also entered
into multi-year  agreements  with affiliates of Diageo plc to provide  packaging
and  distilling   services  for  various  brands  retained  by  the  Diageo  plc
affiliates.  The results of operations from the Black Velvet Assets are reported
in the Barton  segment  and have been  included in the  consolidated  results of
operations of the Company since the date of acquisition.

     ACQUISITION OF MATTHEW CLARK

     On December  1, 1998,  the Company  acquired  control of Matthew  Clark plc
("Matthew  Clark") and as of February  28,  1999,  had  acquired  all of Matthew
Clark's  outstanding  shares (the  "Matthew  Clark  Acquisition").  Prior to the
Matthew Clark  Acquisition,  the Company was principally a producer and supplier
of wine and an importer and producer of beer and distilled spirits in the United
States.  The  Matthew  Clark  Acquisition  established  the Company as a leading
British  producer  of cider,  wine and bottled  water and as a leading  beverage
alcohol  wholesaler in the United Kingdom.  The results of operations of Matthew
Clark  have been  included  in the  consolidated  results of  operations  of the
Company since the date of acquisition, December 1, 1998.


RESULTS OF OPERATIONS
---------------------

FISCAL 2001 COMPARED TO FISCAL 2000

     NET SALES

     The  following  table sets forth the net sales (in thousands of dollars) by
operating segment of the Company for Fiscal 2001 and Fiscal 2000.

                                    Fiscal 2001 Compared to Fiscal 2000
                                  ---------------------------------------
                                                 Net Sales
                                  ---------------------------------------
                                                               %Increase/
                                     2001           2000       (Decrease)
                                  -----------    -----------   ----------
Canandaigua Wine:
  Branded:
    External customers            $   603,948    $   623,796       (3.2)%
    Intersegment                        6,451          5,524       16.8 %
                                  -----------    -----------
    Total Branded                     610,399        629,320       (3.0)%
                                  -----------    -----------
  Other:
    External customers                 61,480         81,442      (24.5)%
    Intersegment                       16,562          1,146     1345.2 %
                                  -----------    -----------
    Total Other                        78,042         82,588       (5.5)%
                                  -----------    -----------
Canandaigua Wine net sales        $   688,441    $   711,908       (3.3)%
                                  -----------    -----------
Barton:
  Beer                            $   659,371    $   570,380       15.6 %
  Spirits                             285,743        267,762        6.7 %
                                  -----------    -----------
Barton net sales                  $   945,114    $   838,142       12.8 %
                                  -----------    -----------

<PAGE>
                                     - 22 -

                                    Fiscal 2001 Compared to Fiscal 2000
                                  ---------------------------------------
                                                 Net Sales
                                  ---------------------------------------
                                                               %Increase/
                                     2001           2000       (Decrease)
                                  -----------    -----------   ----------
Matthew Clark:
  Branded:
    External customers            $   285,717    $   313,027       (8.7)%
    Intersegment                        1,193             75     1490.7 %
                                  -----------    -----------
    Total Branded                     286,910        313,102       (8.4)%
  Wholesale                           404,209        416,644       (3.0)%
                                  -----------    -----------
Matthew Clark net sales           $   691,119    $   729,746       (5.3)%
                                  -----------    -----------
Franciscan:
  External customers              $    92,898    $    62,046       49.7 %
  Intersegment                            217             73      197.3 %
                                  -----------    -----------
Franciscan net sales              $    93,115    $    62,119       49.9 %
                                  -----------    -----------
Corporate Operations and Other    $     3,319    $     5,372      (38.2)%
                                  -----------    -----------
Intersegment eliminations         $   (24,423)   $    (6,818)     258.2 %
                                  -----------    -----------
Consolidated Net Sales            $ 2,396,685    $ 2,340,469        2.4 %
                                  ===========    ===========


     Net sales for Fiscal 2001  increased  to  $2,396.7  million  from  $2,340.5
million for Fiscal 2000, an increase of $56.2 million, or 2.4%.

     Canandaigua Wine
     ----------------

     Net sales for Canandaigua  Wine for Fiscal 2001 decreased to $688.4 million
from $711.9 million for Fiscal 2000, a decrease of $23.5 million, or (3.3)%. The
decline  resulted  primarily  from a decrease in table wine sales, a decrease in
sparkling  wine  sales  as third  quarter  2000  included  the  impact  of sales
associated with Millennium activities, and a decrease in grape juice concentrate
sales.  These  decreases  were  partially  offset by  increases in sales of Paul
Masson Grande Amber and Arbor Mist.

     Barton
     ------

     Net sales for Barton for  Fiscal  2001  increased  to $945.1  million  from
$838.1 million for Fiscal 2000, an increase of $107.0  million,  or 12.8%.  This
increase  resulted  primarily from volume growth and selling price  increases in
the Mexican beer portfolio,  selling price increases on tequila products and the
inclusion of $11.3 million of incremental  net sales during the first quarter of
Fiscal 2001 from the Canadian whisky brands acquired as part of the Black Velvet
Assets acquisition, which was completed in April 1999.

     Matthew Clark
     -------------

     Net sales for Matthew  Clark for Fiscal 2001  decreased  to $691.1  million
from $729.7  million for Fiscal  2000, a decrease of $38.6  million,  or (5.3)%.
This decrease  resulted  primarily from an adverse  foreign  currency  impact of
$58.8 million. On a local currency basis, net sales increased 2.8% primarily due
to an increase in wholesale  sales,  including sales from the recent Forth Wines
acquisition,  an  increase  in branded  table wine  sales,  and an  increase  in
packaged cider sales.  These  increases  were  partially  offset by decreases in
private label cider and draft cider sales.

     Franciscan
     ----------

     Net sales for  Franciscan  for Fiscal 2001  increased to $93.1 million from
$62.1 million for Fiscal 2000, an increase of $31.0  million,  or 49.9%.  As the
acquisition of Franciscan was completed in June

<PAGE>
                                     - 23 -

1999,  this increase  resulted  primarily from the inclusion of $21.9 million of
net sales from the first quarter of Fiscal 2001 and from selling price increases
instituted during the second quarter of Fiscal 2001.

     GROSS PROFIT

     The Company's gross profit increased to $757.5 million for Fiscal 2001 from
$722.5  million for Fiscal  2000,  an increase of $35.0  million,  or 4.8%.  The
dollar  increase  in gross  profit was  primarily  related to volume  growth and
selling  price  increases  in  the  Company's  Mexican  beer  portfolio,   sales
attributable to the acquisitions of Franciscan  (completed in June 1999) and the
Black Velvet  Assets  (completed in April 1999),  and increases in  Franciscan's
selling  prices.  These  increases were partially  offset by an adverse  foreign
currency impact. As a percent of net sales,  gross profit increased to 31.6% for
Fiscal  2001 from  30.9% for  Fiscal  2000,  resulting  primarily  from sales of
higher-margin   distilled  spirits  and  super-premium  and  ultra-premium  wine
acquired  in the  acquisitions  of  the  Black  Velvet  Assets  and  Franciscan,
respectively,  and from improved margins  resulting from selling price increases
in the Company's  imported beer business and the Franciscan fine wine portfolio,
as well as cost improvements in Matthew Clark's cider and wholesale businesses.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     Selling,  general and  administrative  expenses increased to $486.6 million
for Fiscal  2001 from  $481.9  million  for Fiscal  2000,  an  increase  of $4.7
million,  or 1.0%. The dollar  increase in selling,  general and  administrative
expenses  resulted  primarily  from  an  increase  in  selling  expenses  in all
operating  segments,  the  inclusion  of the  Franciscan  business  and expenses
related to the brands acquired in the Black Velvet Assets acquisition for a full
year in Fiscal 2001, and an increase in expenses in Corporate Operations.  These
increases  were  partially  offset by a decrease in  advertising  and  promotion
expenses,  primarily  in  Canandaigua  Wine,  and a favorable  foreign  currency
impact.  Selling,  general and administrative expenses as a percent of net sales
decreased  to 20.3% for Fiscal  2001 as compared to 20.6% for Fiscal 2000 as the
percent  increase  in net sales for Fiscal  2001 was  greater  than the  percent
increase in selling, general and administrative expenses for Fiscal 2001.

     NONRECURRING CHARGES

     The Company  incurred  nonrecurring  charges of $5.5 million in Fiscal 2000
related to the closure of a cider  production  facility within the Matthew Clark
operating  segment in the United  Kingdom  ($2.9  million)  and to a  management
reorganization  within the Canandaigua Wine operating segment ($2.6 million). No
such charges were incurred in Fiscal 2001.

     OPERATING INCOME

     The following table sets forth the operating income/(loss) (in thousands of
dollars) by operating segment of the Company for Fiscal 2001 and Fiscal 2000.

                                           Fiscal 2001 Compared to Fiscal 2000
                                          -------------------------------------
                                                 Operating Income/(Loss)
                                          -------------------------------------
                                             2001         2000       % Increase
                                          ----------   ----------    ----------
Canandaigua Wine                          $   50,789   $   46,778          8.6%
Barton                                       167,680      142,931         17.3%
Matthew Clark                                 48,961       48,473          1.0%
Franciscan                                    24,495       12,708         92 8%
Corporate Operations and Other               (21,057)     (15,849)        32.9%
                                          ----------   ----------
Consolidated Operating Income             $  270,868   $  235,041         15.2%
                                          ==========   ==========

<PAGE>
                                     - 24 -

     As a result of the above  factors,  operating  income  increased  to $270.9
million  for Fiscal 2001 from $235.0  million  for Fiscal  2000,  an increase of
$35.8  million,  or 15.2%.  Exclusive  of the  aforementioned  $2.6  million  in
nonrecurring  charges,  operating  income  for the  Canandaigua  Wine  operating
segment  increased  2.9% in  Fiscal  2001 from  $49.3  million  in Fiscal  2000.
Operating  income  for  the  Matthew  Clark  operating  segment,  excluding  the
aforementioned  nonrecurring  charges of $2.9 million,  decreased 4.8% in Fiscal
2001 from $51.4 million in Fiscal 2000.

     INTEREST EXPENSE, NET

     Net  interest  expense  increased  to $108.6  million  for Fiscal 2001 from
$106.1  million  for Fiscal  2000,  an increase of $2.5  million,  or 2.4%.  The
increase resulted  primarily from an increase in the average interest rate which
was partially offset by a decrease in average borrowings.

     NET INCOME

     As a result of the above factors, net income increased to $97.3 million for
Fiscal 2001 from $77.4 million for Fiscal 2000, an increase of $20.0 million, or
25.8%.

     For  financial  analysis  purposes  only,  the  Company's  earnings  before
interest,  taxes,  depreciation and amortization ("EBITDA") for Fiscal 2001 were
$341.3  million,  an increase of $41.5 million over EBITDA of $299.8 million for
Fiscal  2000.  EBITDA  should not be construed  as an  alternative  to operating
income or net cash flow from operating activities and should not be construed as
an indication of operating performance or as a measure of liquidity.

FISCAL 2000 COMPARED TO FISCAL 1999

     NET SALES

     The  following  table sets forth the net sales (in thousands of dollars) by
operating segment of the Company for Fiscal 2000 and Fiscal 1999.

                                     Fiscal 2000 Compared to Fiscal 1999
                                    -------------------------------------
                                                  Net Sales
                                    -------------------------------------
                                       2000          1999       %Increase
                                    -----------   -----------   ---------
Canandaigua Wine:
  Branded:
    External customers              $   623,796   $   598,782        4.2%
    Intersegment                          5,524          -           N/A
                                    -----------   -----------
    Total Branded                       629,320       598,782        5.1%
                                    -----------   -----------
  Other:
    External customers                   81,442        70,711       15.2%
    Intersegment                          1,146          -           N/A
                                    -----------   -----------
    Total Other                          82,588        70,711       16.8%
                                    -----------   -----------
Canandaigua Wine net sales          $   711,908   $   669,493        6.3%
                                    -----------   -----------
Barton:
  Beer                              $   570,380   $   478,611       19.2%
  Spirits                               267,762       185,938       44.0%
                                    -----------   -----------
Barton net sales                    $   838,142   $   664,549       26.1%
                                    -----------   -----------

<PAGE>
                                     - 25 -

                                     Fiscal 2000 Compared to Fiscal 1999
                                    -------------------------------------
                                                  Net Sales
                                    -------------------------------------
                                       2000          1999       %Increase
                                    -----------   -----------   ---------
Matthew Clark:
  Branded:
    External customers              $   313,027   $    64,879      382.5%
    Intersegment                             75          -           N/A
                                    -----------   -----------
    Total Branded                       313,102        64,879      382.6%
  Wholesale                             416,644        93,881      343.8%
                                    -----------   -----------
Matthew Clark net sales             $   729,746   $   158,760      359.7%
                                    -----------   -----------
Franciscan:
  External customers                $    62,046   $      -           N/A
  Intersegment                               73          -           N/A
                                    -----------   -----------
Franciscan net sales                $    62,119   $      -           N/A
                                    -----------   -----------
Corporate Operations and Other      $     5,372   $     4,541       18.3%
                                    -----------   -----------
Intersegment eliminations           $    (6,818)  $      -           N/A
                                    -----------   -----------
Consolidated Net Sales              $ 2,340,469   $ 1,497,343       56.3%
                                    ===========   ===========

     Net sales for Fiscal 2000  increased  to  $2,340.5  million  from  $1,497.3
million for Fiscal 1999, an increase of $843.1 million, or 56.3%.

     Canandaigua Wine
     ----------------

     Net sales for Canandaigua  Wine for Fiscal 2000 increased to $711.9 million
from $669.5 million for Fiscal 1999, an increase of $42.4 million, or 6.3%. This
increase  resulted  primarily from (i) an increase in sales of Arbor Mist, which
was  introduced  in the second  quarter of Fiscal 1999,  (ii) an increase in the
Company's bulk wine sales, (iii) an increase in sparkling wine sales as a result
of  Millennium  sales,  and (iv) an increase  in Almaden  box wine sales.  These
increases were partially offset by declines in certain other wine brands.

     Barton
     ------

     Net sales for Barton for  Fiscal  2000  increased  to $838.1  million  from
$664.5 million for Fiscal 1999, an increase of $173.6  million,  or 26.1%.  This
increase  resulted  primarily from volume growth and selling price  increases in
the Mexican beer  portfolio  as well as from $81.3  million of sales of products
and services  acquired in the acquisition of the Black Velvet Assets,  which was
completed in April 1999.

     Matthew Clark
     -------------

     Net sales for Matthew  Clark for Fiscal 2000  increased  to $729.7  million
from $158.8 million for Fiscal 1999, an increase of $571.0  million,  or 359.7%.
The  Company  acquired  control of Matthew  Clark  during the fourth  quarter of
Fiscal 1999.

     Franciscan
     ----------

     Net sales for  Franciscan  for Fiscal  2000 since the date of  acquisition,
June 4, 1999, were $62.1 million.

     GROSS PROFIT

     The Company's gross profit increased to $722.5 million for Fiscal 2000 from
$448.0  million for Fiscal 1999, an increase of $274.4  million,  or 61.3%.  The
dollar increase in gross profit was primarily  related to sales  attributable to
the acquisitions of Matthew Clark, the Black Velvet Assets and Franciscan,

<PAGE>
                                     - 26 -

all  completed  after the third  quarter of Fiscal  1999,  as well as  increased
Barton beer and Canandaigua  Wine branded wine sales. As a percent of net sales,
gross profit  increased to 30.9% for Fiscal 2000 from 29.9% for Fiscal 1999. The
increase  in the  gross  profit  margin  resulted  primarily  from the  sales of
higher-margin   distilled  spirits  and  super-premium  and  ultra-premium  wine
acquired  in the  acquisitions  of  the  Black  Velvet  Assets  and  Franciscan,
respectively.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     Selling,  general and  administrative  expenses increased to $481.9 million
for Fiscal  2000 from  $299.5  million  for Fiscal  1999,  an increase of $182.4
million,  or 60.9%. The dollar increase in selling,  general and  administrative
expenses  resulted  primarily  from  the  addition  of  the  Matthew  Clark  and
Franciscan  businesses and expenses  related to the brands acquired in the Black
Velvet  Assets  acquisition.  The  Company  also  increased  its  marketing  and
promotional costs to generate  additional sales volume,  particularly of certain
Canandaigua   Wine  brands  and  Barton  beer  brands.   Selling,   general  and
administrative  expenses as a percent of net sales increased to 20.6% for Fiscal
2000 as compared to 20.0% for Fiscal 1999.  The increase in percent of net sales
resulted  primarily from (i) Canandaigua Wine's investment in brand building and
efforts to increase market share and (ii) the  acquisitions of Matthew Clark and
Franciscan,   as  Matthew  Clark's  and   Franciscan's   selling,   general  and
administrative  expenses as a percent of net sales are typically at the high end
of the range of the Company's operating segments' percentages.

     NONRECURRING CHARGES

     The Company  incurred  nonrecurring  charges of $5.5 million in Fiscal 2000
related to the closure of a cider  production  facility within the Matthew Clark
operating  segment  in the United  Kingdom  and to a  management  reorganization
within the  Canandaigua  Wine operating  segment.  In Fiscal 1999,  nonrecurring
charges  of  $2.6  million  were   incurred   related  to  the  closure  of  the
aforementioned cider production facility in the United Kingdom.

     OPERATING INCOME

     The following table sets forth the operating income/(loss) (in thousands of
dollars) by operating segment of the Company for Fiscal 2000 and Fiscal 1999.

                                      Fiscal 2000 Compared to Fiscal 1999
                                    ---------------------------------------
                                            Operating Income/(Loss)
                                    ---------------------------------------
                                        2000          1999        %Increase
                                    ----------     ----------     ---------
Canandaigua Wine                    $   46,778     $   46,283          1.1%
Barton                                 142,931        102,624         39.3%
Matthew Clark                           48,473          8,998        438.7%
Franciscan                              12,708           -             N/A
Corporate Operations and Other         (15,849)       (12,013)        31.9%
                                    ----------     ----------
Consolidated Operating Income       $  235,041     $  145,892         61.1%
                                    ==========     ==========

     As a result of the above  factors,  operating  income  increased  to $235.0
million  for Fiscal 2000 from $145.9  million  for Fiscal  1999,  an increase of
$89.1 million,  or 61.1%.  Operating  income for the Canandaigua  Wine operating
segment was up $0.5 million,  or 1.1%, due to the  nonrecurring  charges of $2.6
million  related  to  the  segment's  management  reorganization,   as  well  as
additional  marketing  expenses  associated  with  new  product   introductions.
Exclusive of the  nonrecurring  charges,  operating  income increased by 6.6% to
$49.3 million in Fiscal 2000.  Operating  income for the Matthew Clark operating
segment, excluding nonrecurring charges of $2.9 million, was $51.4 million.

<PAGE>
                                     - 27 -

     INTEREST EXPENSE, NET

     Net interest expense increased to $106.1 million for Fiscal 2000 from $41.5
million for Fiscal 1999, an increase of $64.6 million,  or 155.9%.  The increase
resulted  primarily  from  additional   interest  expense  associated  with  the
borrowings related to the acquisitions of Matthew Clark, the Black Velvet Assets
and Franciscan.

     NET INCOME

     As a result of the above factors, net income increased to $77.4 million for
Fiscal 2000 from $50.5 million for Fiscal 1999, an increase of $26.9 million, or
53.3%.

     For  financial  analysis  purposes  only,  the  Company's  earnings  before
interest,  taxes,  depreciation and amortization ("EBITDA") for Fiscal 2000 were
$299.8 million,  an increase of $115.3 million over EBITDA of $184.5 million for
Fiscal  1999.  EBITDA  should not be construed  as an  alternative  to operating
income or net cash flow from operating activities and should not be construed as
an indication of operating performance or as a measure of liquidity.


FINANCIAL LIQUIDITY AND CAPITAL RESOURCES
-----------------------------------------

GENERAL

     The  Company's  principal  use of cash in its  operating  activities is for
purchasing and carrying  inventories.  The Company's primary source of liquidity
has historically  been cash flow from operations,  except during the annual fall
grape harvests when the Company has relied on short-term borrowings.  The annual
grape crush  normally  begins in August and runs  through  October.  The Company
generally  begins  purchasing  grapes in August  with  payments  for such grapes
beginning to come due in  September.  The  Company's  short-term  borrowings  to
support  such  purchases  generally  reach their  highest  levels in November or
December. Historically, the Company has used cash flow from operating activities
to repay  its  short-term  borrowings.  The  Company  will  continue  to use its
short-term borrowings to support its working capital  requirements.  The Company
believes  that  cash  provided  by  operating   activities   and  its  financing
activities,  primarily short-term borrowings, will provide adequate resources to
satisfy its working  capital,  liquidity  and  anticipated  capital  expenditure
requirements for both its short-term and long-term capital needs.

FISCAL 2001 CASH FLOWS

     OPERATING ACTIVITIES

     Net cash  provided  by  operating  activities  for  Fiscal  2001 was $103.8
million,  which resulted from $177.5 million in net income  adjusted for noncash
items, less $73.8 million representing the net change in the Company's operating
assets and  liabilities.  The net  change in  operating  assets and  liabilities
resulted primarily from increases in inventories and accounts receivable,  and a
decrease in accounts payable,  partially offset by an increase in accrued excise
taxes.

     INVESTING ACTIVITIES AND FINANCING ACTIVITIES

     Net cash used in investing  activities  for Fiscal 2001 was $70.7  million,
which resulted primarily from capital  expenditures of $68.2 million,  including
$16.8 million for vineyards.

<PAGE>
                                     - 28 -

     Net cash  provided  by  financing  activities  for  Fiscal  2001 was  $83.4
million,  which  resulted  primarily  from  proceeds of $319.4  million from the
issuance of long-term debt, including $200.0 million incurred in connection with
the  acquisition of the Turner Road  Vintners'  Assets and  (pound)80.0  million
($119.4 million upon issuance,  net of $0.6 million  unamortized  discount) of 8
1/2%  Sterling  Series C Senior  Notes used to repay a portion of the  Company's
British pound sterling borrowings under its senior credit facility.  This amount
was partially offset by principal  payments of long-term debt of $221.9 million,
which  included $27.5 million of scheduled and required  principal  payments and
$75.0 million of principal prepayments.

     During  June  1998,  the  Company's  Board  of  Directors   authorized  the
repurchase  of up to  $100.0  million  of its  Class A Common  Stock and Class B
Common Stock.  The  repurchase  of shares of common stock will be  accomplished,
from  time to  time,  in  management's  discretion  and  depending  upon  market
conditions,  through  open  market or  privately  negotiated  transactions.  The
Company may finance such  repurchases  through cash generated from operations or
through the senior credit facility.  The repurchased shares will become treasury
shares. As of May 29, 2001, the Company had purchased  2,037,672 shares of Class
A Common Stock at an aggregate cost of $44.9  million,  or at an average cost of
$22.02 per share.

DEBT

     Total debt  outstanding  as of  February  28,  2001,  amounted  to $1,365.8
million, an increase of $47.9 million from February 29, 2000. The ratio of total
debt to total  capitalization  decreased to 68.9% as of February 28, 2001,  from
71.7% as of February 29, 2000.

     SENIOR CREDIT FACILITY

     As of  February  28,  2001,  under the 2000  Credit  Agreement  (as defined
below),  the  Company had  outstanding  term loans of $337.6  million  bearing a
weighted average interest rate of 8.2%, no outstanding  revolving loans, undrawn
letters of credit of $12.3  million,  and  $287.7  million  in  revolving  loans
available to be drawn.

     During  June  1999,  the  Company  financed  the  purchase  price  for  the
Franciscan  Acquisition  primarily through additional term loan borrowings under
its previous senior credit facility. The Company financed the purchase price for
the Simi Acquisition with revolving loan borrowings under the same senior credit
facility.  During  August 1999, as discussed  below,  a portion of the Company's
borrowings  under that senior credit  facility were repaid with the net proceeds
of its Senior Notes (as defined below) offering.

     On  October 6,  1999,  the  Company,  certain  of its  principal  operating
subsidiaries,  and a syndicate of banks (the "Syndicate  Banks"),  for which The
Chase Manhattan Bank acts as administrative  agent, entered into a senior credit
facility (as subsequently amended, the "2000 Credit Agreement"). The 2000 Credit
Agreement  includes both U.S.  dollar and British pound sterling  commitments of
the Syndicate  Banks of up to, in the aggregate,  the equivalent of $1.0 billion
(subject to increase as therein provided to $1.2 billion).  Proceeds of the 2000
Credit  Agreement  were  used to repay all  outstanding  principal  and  accrued
interest on all loans under the Company's prior senior credit facility,  and are
available to fund permitted  acquisitions  and ongoing  working capital needs of
the Company and its subsidiaries.

     The 2000 Credit Agreement provides for a $380.0 million Tranche I Term Loan
facility due in December  2004, a $320.0  million  Tranche II Term Loan facility
available for borrowing in British pound  sterling due in December  2004,  and a
$300.0 million  Revolving Credit facility  (including  letters of credit up to a
maximum of $20.0  million)  which expires in December  2004.  The Tranche I Term
Loan  facility   ($380.0   million)  and  the  Tranche  II  Term  Loan  facility
((pound)193.4  million,  or $320.0 million) were fully drawn at closing.  During
Fiscal 2001, the Company used cash from operating activities to prepay a

<PAGE>
                                     - 29 -

portion  of  the  $380.0  million  Tranche  I Term  Loan  facility.  After  this
prepayment,  the  required  quarterly  repayments  of the  Tranche  I Term  Loan
facility  were  revised to $15.6  million  starting in June 2001 and  increasing
thereafter  annually  with final  payments of $20.6  million in each  quarter in
2004. On November 17, 1999,  proceeds from the Sterling Senior Notes (as defined
below) were used to repay a portion of the $320.0  million  Tranche II Term Loan
facility  ((pound)73.0  million,  or $118.3 million).  On May 15, 2000, proceeds
from the Sterling Series C Senior Notes (as defined below) were used to repay an
additional  portion  of  the  $320.0  million  Tranche  II  Term  Loan  facility
((pound)78.8 million, or $118.2 million).  After these repayments,  the required
quarterly  repayments  of the  Tranche  II Term Loan  facility  were  revised to
(pound)0.4 million ($0.6 million) for each quarter in 2001 and 2002,  (pound)0.5
million ($0.7 million) for each quarter in 2003,  and (pound)8.5  million ($12.3
million) for each quarter in 2004 (the foregoing U.S. dollar  equivalents are as
of February  28,  2001).  There are  certain  mandatory  term loan  prepayments,
including those based on sale of assets and issuance of debt and equity, in each
case subject to customary baskets, exceptions and thresholds.

     The rate of interest payable, at the Company's option, is a function of the
London interbank offering rate ("LIBOR") plus a margin,  federal funds rate plus
a margin,  or the prime rate plus a margin.  The margin is adjustable based upon
the  Company's  Debt Ratio (as defined in the 2000 Credit  Agreement)  and, with
respect to LIBOR borrowings, ranges between 0.75% and 1.25% for Revolving Credit
loans and 1.00% and 1.75% for Term Loans.  As of February 28,  2001,  the margin
was 1.125% for Revolving  Credit loans and 1.625% for Term Loans. In addition to
interest, the Company pays a facility fee on the Revolving Credit commitments at
0.50% per annum as of February  28, 2001.  This fee is based upon the  Company's
quarterly Debt Ratio and can range from 0.25% to 0.50%.

     Certain of the Company's principal  operating  subsidiaries have guaranteed
the  Company's  obligations  under the 2000  Credit  Agreement.  The 2000 Credit
Agreement is secured by (i) first priority  pledges of 100% of the capital stock
of Canandaigua Limited and all of the Company's domestic operating  subsidiaries
and (ii) first priority pledges of 65% of the capital stock of Matthew Clark and
certain other foreign subsidiaries.

     The Company and its subsidiaries are subject to customary lending covenants
including those restricting additional liens, incurring additional indebtedness,
the sale of assets,  the payment of dividends,  transactions with affiliates and
the making of certain  investments,  in each case subject to customary  baskets,
exceptions  and  thresholds.   The  primary  financial   covenants  require  the
maintenance  of a debt coverage  ratio,  a senior debt coverage  ratio,  a fixed
charges  ratio  and an  interest  coverage  ratio.  Among  the most  restrictive
covenants contained in the 2000 Credit Agreement is the debt coverage ratio.

     On February 13, 2001, the 2000 Credit Agreement was amended to, among other
things,  permit the  Company  to  finance  the  acquisition  of the Turner  Road
Vintners  Assets with revolving loan  borrowings,  permit the refinancing of the
Original  Notes (as defined  below) and Series C Notes (as  defined  below) with
senior notes, and adjust the senior debt coverage ratio covenant.

     SENIOR NOTES

     On August 4, 1999, the Company issued $200.0  million  aggregate  principal
amount of 8 5/8% Senior Notes due August 2006 (the "August 1999 Senior  Notes").
The net proceeds of the offering  ($196.0  million) were used to repay a portion
of the Company's  borrowings under its senior credit  facility.  Interest on the
August 1999 Senior Notes is payable  semiannually  on February 1 and August 1 of
each  year,  beginning  February  1,  2000.  The August  1999  Senior  Notes are
redeemable at the option of the Company,  in whole or in part, at any time.  The
August 1999 Senior Notes are unsecured  senior  obligations  and rank equally in
right of payment to all existing and future unsecured senior indebtedness of the
Company.  The August 1999 Senior Notes are  guaranteed,  on a senior  basis,  by
certain of the Company's significant operating subsidiaries.

<PAGE>
                                     - 30 -

     On November  17,  1999,  the Company  issued  (pound)75.0  million  ($121.7
million upon  issuance)  aggregate  principal  amount of 8 1/2% Senior Notes due
November 2009 (the "Sterling  Senior  Notes").  The net proceeds of the offering
((pound)73.0  million,  or $118.3  million)  were used to repay a portion of the
Company's  British pound sterling  borrowings  under its senior credit facility.
Interest on the  Sterling  Senior  Notes is payable  semiannually  on May 15 and
November 15 of each year,  beginning on May 15, 2000. The Sterling  Senior Notes
are  redeemable at the option of the Company,  in whole or in part, at any time.
The Sterling Senior Notes are unsecured  senior  obligations and rank equally in
right of payment to all existing and future unsecured senior indebtedness of the
Company. The Sterling Senior Notes are guaranteed, on a senior basis, by certain
of the Company's significant operating subsidiaries.  In March 2000, the Company
exchanged  (pound)75.0  million  aggregate  principal  amount of 8 1/2% Series B
Senior Notes due in November 2009 (the "Sterling Series B Senior Notes") for all
of the Sterling  Senior Notes.  The terms of the Sterling  Series B Senior Notes
are identical in all material  respects to the Sterling Senior Notes. In October
2000, the Company exchanged  (pound)74.0  million aggregate  principal amount of
Sterling Series C Senior Notes (as defined below) for (pound)74.0 million of the
Sterling  Series B Notes.  The terms of the  Sterling  Series C Senior Notes are
identical in all material  respects to the Sterling Series B Senior Notes. As of
February 28, 2001, the Company had outstanding (pound)1.0 million ($1.4 million)
aggregate principal amount of Sterling Series B Senior Notes.

     On May 15, 2000, the Company issued  (pound)80.0  million  ($120.0  million
upon issuance)  aggregate  principal  amount of 8 1/2% Series C Senior Notes due
November 2009 at an issuance price of (pound)79.6  million  ($119.4 million upon
issuance,  net of $0.6 million unamortized discount,  with an effective interest
rate of 8.6%) (the "Sterling  Series C Senior  Notes").  The net proceeds of the
offering  ((pound)78.8  million, or $118.2 million) were used to repay a portion
of the  Company's  British  pound  sterling  borrowings  under its senior credit
facility. Interest on the Sterling Series C Senior Notes is payable semiannually
on May 15 and November 15 of each year,  beginning  on November  15,  2000.  The
Sterling  Series C Senior Notes are redeemable at the option of the Company,  in
whole or in part, at any time. The Sterling  Series C Senior Notes are unsecured
senior  obligations  and rank  equally in right of payment to all  existing  and
future  unsecured  senior  indebtedness  of the Company.  The Sterling  Series C
Senior Notes are  guaranteed,  on a senior  basis,  by certain of the  Company's
significant  operating  subsidiaries.  As of February 28, 2001,  the Company had
outstanding   (pound)154.0   million  ($222.1  million,   net  of  $0.5  million
unamortized  discount)  aggregate  principal  amount of Sterling Series C Senior
Notes.

     On February 21, 2001, the Company issued $200.0 million aggregate principal
amount of 8% Senior Notes due February 2008 (the "February 2001 Senior  Notes").
The net proceeds of the offering  ($197.0  million) were used to partially  fund
the  acquisition  of the Turner Road Vintners  Assets.  Interest on the February
2001 Senior Notes is payable  semiannually  on February 15 and August 15 of each
year,  beginning  August 15, 2001. The February 2001 Senior Notes are redeemable
at the option of the  Company,  in whole or in part,  at any time.  The February
2001 Senior Notes are unsecured senior  obligations and rank equally in right of
payment to all existing and future unsecured senior indebtedness of the Company.
The February 2001 Senior Notes are guaranteed,  on a senior basis, by certain of
the Company's significant operating subsidiaries.

     SENIOR SUBORDINATED NOTES

     As of  February  28,  2001,  the  Company had  outstanding  $195.0  million
aggregate  principal  amount of 8 3/4% Senior  Subordinated  Notes due  December
2003,  being the $130.0  million  aggregate  principal  amount of 8 3/4%  Senior
Subordinated  Notes due  December  2003 issued in December  1993 (the  "Original
Notes")  and the $65.0  million  aggregate  principal  amount of 8 3/4% Series C
Senior Subordinated Notes due December 2003 issued in February 1997 (the "Series
C Notes").  The Original Notes and the Series C Notes are currently  redeemable,
in whole or in part, at the option of the Company.

<PAGE>
                                     - 31 -

A brief description of the Original Notes and the Series C Notes is contained in
Note 6 to the Company's  consolidated  financial statements located in Item 8 of
this Annual Report on Form 10-K.

     On March 4, 1999,  the Company issued $200.0  million  aggregate  principal
amount  of 8  1/2%  Senior  Subordinated  Notes  due  March  2009  (the  "Senior
Subordinated  Notes").  The net proceeds of the offering  ($195.0  million) were
used to fund the  acquisition of the Black Velvet Assets and to pay the fees and
expenses related thereto with the remainder of the net proceeds used for general
corporate  purposes.  Interest  on the  Senior  Subordinated  Notes  is  payable
semiannually  on March 1 and  September 1 of each year,  beginning  September 1,
1999. The Senior Subordinated Notes are redeemable at the option of the Company,
in whole or in part, at any time on or after March 1, 2004. The Company may also
redeem up to $70.0 million of the Senior  Subordinated  Notes using the proceeds
of  certain  equity  offerings  completed  before  March  1,  2002.  The  Senior
Subordinated  Notes are unsecured and  subordinated to the prior payment in full
of all senior  indebtedness  of the Company,  which  includes the senior  credit
facility. The Senior Subordinated Notes are guaranteed, on a senior subordinated
basis, by certain of the Company's significant operating subsidiaries.

EQUITY OFFERING

     During March,  2001, the Company  completed a public  offering of 4,370,000
shares of its Class A Common  Stock  resulting  in net  proceeds to the Company,
after deducting  underwriting discounts and expenses, of $139.4 million. The net
proceeds were used to repay  revolving loan  borrowings  under the senior credit
facility of which a portion was incurred to partially finance the acquisition of
the Turner Road Vintners Assets.

CAPITAL EXPENDITURES

     During  Fiscal  2001,  the  Company  incurred  $68.2  million  for  capital
expenditures, including $16.8 million related to vineyards. The Company plans to
spend  between  $65.0  million  and  $70.0  million  for  capital  expenditures,
exclusive of vineyards,  in fiscal 2002. In addition,  the Company  continues to
consider  the  purchase,  lease  and  development  of  vineyards  and may  incur
additional  expenditures for vineyards if opportunities  become  available.  See
"Business  - Sources and  Availability  of Raw  Materials"  under Item 1 of this
Annual Report on Form 10-K.  Management reviews the capital  expenditure program
periodically and modifies it as required to meet current business needs.

COMMITMENTS

     The Company has agreements  with suppliers to purchase  various  spirits of
which certain  agreements are denominated in British pound sterling and Canadian
dollars.  The  maximum  future  obligation  under these  agreements,  based upon
exchange  rates at February  28, 2001,  aggregate  $22.6  million for  contracts
expiring through December 2005.

     At February 28, 2001,  the Company had open currency  forward  contracts to
purchase  various foreign  currencies of $7.3 million which mature within twelve
months.  The  Company's  use of such  contracts is limited to the  management of
currency rate risks related to purchases denominated in a foreign currency.  The
Company's  strategy is to enter only into currency  exchange  contracts that are
matched to specific purchases and not to enter into any speculative contracts.

EFFECTS OF INFLATION AND CHANGING PRICES

     The Company's  results of operations and financial  condition have not been
significantly affected by inflation and changing prices, including rising energy
and tequila  costs.  The Company  has been able,  subject to normal  competitive
conditions, to pass along rising costs through increased selling prices.

<PAGE>
                                     - 32 -

There can be no assurances,  however,  that the Company will continue to be able
to pass along rising costs through increased selling prices.

ACCOUNTING PRONOUNCEMENTS

     In June 1998, the Financial  Accounting Standards Board issued Statement of
Financial  Accounting  Standards  No.  133  ("SFAS No.  133"),  "Accounting  for
Derivative  Instruments  and  Hedging  Activities."  SFAS  No.  133  establishes
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts  (collectively referred to as
derivatives),  and for  hedging  activities.  SFAS No. 133  requires  that every
derivative  be recorded as either an asset or liability in the balance sheet and
measured  at its fair  value.  SFAS No. 133 also  requires  that  changes in the
derivative's  fair value be  recognized  currently in earnings  unless  specific
hedge  accounting  criteria are met.  Special  accounting for qualifying  hedges
allows a derivative's  gains and losses to offset related  results on the hedged
item in the income  statement,  and requires that a company  formally  document,
designate  and assess the  effectiveness  of  transactions  that  receive  hedge
accounting.

     In June 1999, the Financial  Accounting Standards Board issued Statement of
Financial  Accounting  Standards  No.  137  ("SFAS No.  137"),  "Accounting  for
Derivative Instruments and Hedging Activities--Deferral of the Effective Date of
FASB  Statement No. 133." SFAS No. 137 delays the effective date of SFAS No. 133
for one year.  With the  issuance  of SFAS No.  137,  the Company is required to
adopt SFAS No. 133 on a prospective  basis for interim  periods and fiscal years
beginning March 1, 2001.

     In June 2000, the Financial  Accounting Standards Board issued Statement of
Financial Accounting Standards No. 138 ("SFAS No. 138"), "Accounting for Certain
Derivative  Instruments  and Certain  Hedging  Activities--an  amendment of FASB
Statement No. 133." SFAS No. 138 amends the accounting  and reporting  standards
of  SFAS  No.  133  for  certain  derivative  instruments  and  certain  hedging
activities. The Company is required to adopt SFAS No. 138 concurrently with SFAS
No. 133. The Company  believes the effect of the adoption of these statements on
its financial  statements  will not be material  based on the Company's  current
risk management strategies.

     In May 2000, the Emerging  Issues Task Force ("EITF") issued EITF Issue No.
00-14 ("EITF No. 00-14"),  "Accounting for Certain Sales  Incentives," which was
subsequently  amended in April 2001. EITF No. 00-14  addresses the  recognition,
measurement and income  statement  classification  of certain sales  incentives.
EITF No. 00-14 requires that sales incentives, including coupons, rebate offers,
and free product offers,  given concurrently with a single exchange  transaction
be recognized when incurred and reported as a reduction of revenue.  The Company
currently reports these costs in selling,  general and administrative  expenses.
The  Company  is  required  to  adopt  EITF  00-14 in its  financial  statements
beginning March 1, 2002. Upon adoption of EITF 00-14,  financial  statements for
prior  periods  presented for  comparative  purposes are to be  reclassified  to
comply with the  requirements of EITF 00-14.  The Company believes the impact of
EITF   00-14  on  its   financial   statements   will   result  in  a   material
reclassification  that will decrease  previously reported net sales and decrease
previously reported selling,  general and administrative expenses, but will have
no effect on operating income or net income.  The Company has not yet determined
the amount of the reclassification.

<PAGE>
                                     - 33 -

EURO CONVERSION ISSUES

     Effective  January 1, 1999,  eleven of the fifteen member  countries of the
European Union (the  "Participating  Countries")  established  fixed  conversion
rates between their existing sovereign  currencies and the euro. For three years
after the  introduction  of the euro,  the  Participating  Countries can perform
financial  transactions  in either the euro or their original local  currencies.
This will result in a fixed  exchange  rate among the  Participating  Countries,
whereas the euro (and the  Participating  Countries'  currency  in tandem)  will
continue to float freely  against the U.S.  dollar and other  currencies  of the
non-participating  countries.  The Company  does not believe that the effects of
the conversion will have a material adverse effect on the Company's business and
operations.


ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
--------  ----------------------------------------------------------

     The Company is exposed to market risk  associated  with changes in interest
rates and foreign currency exchange rates. To manage the volatility  relating to
these  risks,  the  Company  periodically  enters into  derivative  transactions
including foreign currency exchange contracts and interest rate swap agreements.
The Company has limited  involvement with derivative  financial  instruments and
does not use them for trading purposes.  The Company uses derivative instruments
solely to reduce the financial impact of these risks.

     The fair  value  of  long-term  debt is  subject  to  interest  rate  risk.
Generally, the fair value of long-term debt will increase as interest rates fall
and decrease as interest  rates rise.  The estimated fair value of the Company's
total long-term debt,  including  current  maturities,  was $1,380.1  million at
February 28, 2001. A hypothetical 1% increase from prevailing  interest rates at
February  28, 2001,  would result in a decrease in fair value of fixed  interest
rate  long-term debt by $49.9  million.  Also, a  hypothetical  1% increase from
prevailing  interest rates at February 28, 2001,  would result in an approximate
increase in cash required for interest on variable interest rate debt during the
next five fiscal years as follows:

                         2002       $3.1 million
                         2003       $2.5 million
                         2004       $1.7 million
                         2005       $0.7 million
                         2006       $ -

     The Company  periodically  enters into  interest  rate swap  agreements  to
reduce its exposure to interest rate changes  relative to its long-term debt. At
February 28, 2001, the Company had no interest rate swap agreements outstanding.

     The Company has  exposure  to foreign  currency  risk as a result of having
international  subsidiaries in the United Kingdom and Canada.  For the Company's
operations in the United Kingdom,  the Company uses local currency borrowings to
hedge its earnings and cash flow exposure to adverse changes in foreign currency
exchange  rates. At February 28, 2001,  management  believes that a hypothetical
10%  adverse  change in foreign  currency  exchange  rates would not result in a
material  adverse  impact on either  earnings or cash flow. The Company also has
exposure to foreign currency risk as a result of contracts to purchase inventory
items that are denominated in various foreign currencies. In order to reduce the
risk of  foreign  currency  exchange  rate  fluctuations  resulting  from  these
contracts,  the  Company  periodically  enters  into  foreign  exchange  hedging
agreements.  At February 28, 2001,  the potential  loss on  outstanding  foreign
exchange  hedging  agreements from a hypothetical  10% adverse change in foreign
currency exchange rates would not be material.

<PAGE>
                                     - 34 -

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
-------  -------------------------------------------


                   CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
                   -------------------------------------------

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                                       AND
                                       ---
                             SUPPLEMENTARY SCHEDULES
                             -----------------------

                                FEBRUARY 28, 2001
                                -----------------



The following information is presented in this Annual Report on Form 10-K:

<TABLE>
<CAPTION>
                                                                                           Page
                                                                                           ----
   <S>                                                                                      <C>
   Report of Independent Public Accountants.............................................    35
   Consolidated Balance Sheets - February 28, 2001, and February 29, 2000...............    36
   Consolidated Statements of Income for the years ended February 28, 2001,
      February 29, 2000, and February 28, 1999..........................................    37
   Consolidated Statements of Changes in Stockholders' Equity for the years
      ended February 28, 2001, February 29, 2000, and February 28, 1999.................    38
   Consolidated Statements of Cash Flows for the years ended
      February 28, 2001, February 29, 2000, and February 28, 1999.......................    39
   Notes to Consolidated Financial Statements...........................................    40
   Selected Quarterly Financial Information (unaudited).................................    68

</TABLE>

Schedules I through V are not submitted  because they are not  applicable or not
required under the rules of Regulation S-X.

Individual  financial statements of the Registrant have been omitted because the
Registrant is primarily an operating  company and no subsidiary  included in the
consolidated financial statements has minority equity interest and/or noncurrent
indebtedness,  not  guaranteed  by the  Registrant,  in  excess  of 5% of  total
consolidated assets.

<PAGE>
                                     - 35 -

                                                [LOGO] ARTHUR ANDERSEN


REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Constellation Brands, Inc.:

We have audited the  accompanying  consolidated  balance sheets of Constellation
Brands,  Inc. (a Delaware  corporation) and subsidiaries as of February 28, 2001
and  February  29,  2000,  and the related  consolidated  statements  of income,
changes in  stockholders'  equity and cash flows for each of the three  years in
the  period  ended  February  28,  2001.  These  financial  statements  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Constellation Brands, Inc. and
subsidiaries  as of February 28, 2001 and February 29, 2000,  and the results of
their  operations and their cash flows for each of the three years in the period
ended  February 28, 2001 in  conformity  with  accounting  principles  generally
accepted in the United States.


                                                  /s/ Arthur Andersen LLP

Rochester, New York
April 10, 2001

<PAGE>
                                     - 36 -

                   CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                 (in thousands, except share and per share data)

                                                   February 28,    February 29,
                                                       2001            2000
                                                   ------------    ------------
                     ASSETS
                     ------
CURRENT ASSETS:
  Cash and cash investments                        $    145,672    $     34,308
  Accounts receivable, net                              314,262         291,108
  Inventories, net                                      670,018         615,700
  Prepaid expenses and other current assets              61,037          54,881
                                                   ------------    ------------
    Total current assets                              1,190,989         995,997
PROPERTY, PLANT AND EQUIPMENT, net                      548,614         542,971
OTHER ASSETS                                            772,566         809,823
                                                   ------------    ------------
  Total assets                                     $  2,512,169    $  2,348,791
                                                   ============    ============

     LIABILITIES AND STOCKHOLDERS' EQUITY
     ------------------------------------
CURRENT LIABILITIES:
  Notes payable                                    $      4,184    $     28,134
  Current maturities of long-term debt                   54,176          52,653
  Accounts payable                                      114,793         122,213
  Accrued excise taxes                                   55,954          30,446
  Other accrued expenses and liabilities                198,053         204,771
                                                   ------------    ------------
    Total current liabilities                           427,160         438,217
                                                   ------------    ------------
LONG-TERM DEBT, less current maturities               1,307,437       1,237,135
                                                   ------------    ------------
DEFERRED INCOME TAXES                                   131,974         116,447
                                                   ------------    ------------
OTHER LIABILITIES                                        29,330          36,152
                                                   ------------    ------------
COMMITMENTS AND CONTINGENCIES (See Note 12)

STOCKHOLDERS' EQUITY:
  Preferred Stock, $.01 par value-
    Authorized, 1,000,000 shares;
    Issued, none at February 28, 2001,
    and February 29, 2000                                  -               -
  Class A Common Stock, $.01 par value-
    Authorized, 120,000,000 shares;
    Issued, 37,438,968 shares at
    February 28, 2001, and 36,413,324 shares
    at February 29, 2000                                    374             364
  Class B Convertible Common Stock,
    $.01 par value-
    Authorized, 20,000,000 shares;
    Issued, 7,402,594 shares at
    February 28, 2001, and 7,491,120 shares
    at February 29, 2000                                     74              75
  Additional paid-in capital                            267,655         247,730
  Retained earnings                                     455,798         358,456
  Accumulated other comprehensive loss-
    Cumulative translation adjustment                   (26,004)         (4,149)
                                                   ------------    ------------
                                                        697,897         602,476
                                                   ------------    ------------
  Less-Treasury stock-
  Class A Common Stock, 6,200,600 shares at
    February 28, 2001, and 6,274,488 shares at
    February 29, 2000, at cost                          (79,271)        (79,429)
  Class B Convertible Common Stock, 1,251,450
    shares at February 28, 2001, and
    February 29, 2000, at cost                           (2,207)         (2,207)
                                                   ------------    ------------
                                                        (81,478)        (81,636)
                                                   ------------    ------------
  Less-Unearned compensation-
    restricted stock awards                                (151)           -
                                                   ------------    ------------
    Total stockholders' equity                          616,268         520,840
                                                   ------------    ------------
  Total liabilities and stockholders' equity       $  2,512,169    $  2,348,791
                                                   ============    ============

          The accompanying notes to consolidated financial statements
                 are an intergral part of these balance sheets.

<PAGE>
                                     - 37 -
<TABLE>
                                CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
                                     CONSOLIDATED STATEMENTS OF INCOME
                                   (in thousands, except per share data)

<CAPTION>
                                                                          For the Years Ended
                                                            ------------------------------------------------
                                                            February 28,      February 29,      February 28,
                                                                2001              2000              1999
                                                            ------------      ------------      ------------
<S>                                                         <C>               <C>               <C>
GROSS SALES                                                 $  3,154,294      $  3,088,699      $  1,984,801
  Less - Excise taxes                                           (757,609)         (748,230)         (487,458)
                                                            ------------      ------------      ------------
    Net sales                                                  2,396,685         2,340,469         1,497,343
COST OF PRODUCT SOLD                                          (1,639,230)       (1,618,009)       (1,049,309)
                                                            ------------      ------------      ------------
    Gross profit                                                 757,455           722,460           448,034
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES                    (486,587)         (481,909)         (299,526)
NONRECURRING CHARGES                                                -               (5,510)           (2,616)
                                                            ------------      ------------      ------------
    Operating income                                             270,868           235,041           145,892
INTEREST EXPENSE, net                                           (108,631)         (106,082)          (41,462)
                                                            ------------      ------------      ------------
    Income before income taxes and extraordinary item            162,237           128,959           104,430
PROVISION FOR INCOME TAXES                                       (64,895)          (51,584)          (42,521)
                                                            ------------      ------------      ------------
    Income before extraordinary item                              97,342            77,375            61,909
EXTRAORDINARY ITEM, net of income taxes                             -                 -              (11,437)
                                                            ------------      ------------      ------------
NET INCOME                                                  $     97,342      $     77,375      $     50,472
                                                            ============      ============      ============


SHARE DATA:
Earnings per common share:
  Basic:
  Income before extraordinary item                          $       2.65      $       2.14      $       1.69
  Extraordinary item, net of income taxes                           -                 -                (0.31)
                                                            ------------      ------------      ------------
  Earnings per common share - basic                         $       2.65      $       2.14      $       1.38
                                                            ============      ============      ============

  Diluted:
  Income before extraordinary item                          $       2.60      $       2.09      $       1.65
  Extraordinary item, net of income taxes                           -                 -                (0.30)
                                                            ------------      ------------      ------------
  Earnings per common share - diluted                       $       2.60      $       2.09      $       1.35
                                                            ============      ============      ============

Weighted average common shares outstanding:
  Basic                                                           36,723            36,108            36,587
  Diluted                                                         37,375            36,998            37,507
<FN>
   The accompanying notes to consolidated financial statements are an integral part of these statements.
</FN>
</TABLE>

<PAGE>
                                     - 38 -
<TABLE>
                                               CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
                                        CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                                    (in thousands, except share data)

<CAPTION>
                                                                                 Accumulated
                                       Common Stock      Additional                 Other
                                     -----------------     Paid-in    Retained  Comprehensive    Treasury     Unearned
                                     Class A   Class B     Capital    Earnings      Loss          Stock     Compensation    Total
                                     -------   -------   ----------  ---------  -------------   ----------  ------------  ---------
<S>                                  <C>       <C>       <C>         <C>        <C>             <C>         <C>           <C>
BALANCE, February 28, 1998           $   352   $    79   $  231,472  $ 230,609  $        -      $  (37,085) $       -     $ 425,427
Comprehensive income:
  Net income for Fiscal 1999            -         -            -        50,472           -            -             -        50,472
  Cumulative translation adjustment     -         -            -          -            (4,173)        -             -        (4,173)
                                                                                                                          ---------
Comprehensive income                                                                                                         46,299
Conversion of 214,020 Class B
  Convertible Common shares to
  Class A Common shares                    2        (2)        -          -              -            -             -          -
Exercise of 407,130 Class A
  stock options                            4      -           4,083       -              -            -             -         4,087
Employee stock purchases of
  99,700 treasury shares                -         -           1,643       -              -             197          -         1,840
Repurchases of 2,037,672 Class A
  Common shares                         -         -            -          -              -         (44,878)         -       (44,878)
Acceleration of 2,500 Class A
  stock options                         -         -              43       -              -            -             -            43
Tax benefit on Class A stock
  options exercised                     -         -           2,320       -              -            -             -         2,320
Tax benefit on disposition of
  employee stock purchases              -         -             134       -              -            -             -           134
                                     -------   -------   ----------  ---------  -------------   ----------  ------------  ---------

BALANCE, February 28, 1999               358        77      239,695    281,081         (4,173)     (81,766)         -       435,272
Comprehensive income:
  Net income for Fiscal 2000            -         -            -        77,375           -            -             -        77,375
  Cumulative translation adjustment     -         -            -          -                24         -             -            24
                                                                                                                          ---------
Comprehensive income                                                                                                         77,399
Conversion of 207,226 Class B
  Convertible Common shares to
  Class A Common shares                    2        (2)        -          -              -            -             -          -
Exercise of 375,380 Class A
  stock options                            4      -           3,359       -              -            -             -         3,363
Employee stock purchases of 62,124
  treasury shares                       -         -           1,298       -              -             130          -         1,428
Acceleration of 189,450 Class A
  stock options                         -         -             835       -              -            -             -           835
Tax benefit on Class A stock
  options exercised                     -         -           2,634       -              -            -             -         2,634
Tax benefit on disposition of
  employee stock purchases              -         -              43       -              -            -             -            43
Other                                   -         -            (134)      -              -            -             -          (134)
                                     -------   -------   ----------  ---------  -------------   ----------  ------------  ---------

BALANCE, February 29, 2000               364        75      247,730    358,456         (4,149)     (81,636)         -       520,840
Comprehensive income:
  Net income for Fiscal 2001            -         -            -        97,342           -            -             -        97,342
  Cumulative translation adjustment     -         -            -          -           (21,855)        -             -       (21,855)
                                                                                                                          ---------
Comprehensive income                                                                                                         75,487
Conversion of 88,526 Class B
  Convertible Common shares to
  Class A Common shares                    1        (1)        -          -              -            -             -          -
Exercise of 929,568 Class A
  stock options                            9      -          13,821       -              -            -             -        13,830
Employee stock purchases of 73,888
  treasury shares                       -         -           1,389       -              -             158          -         1,547
Acceleration of 31,750 Class A
  stock options                         -         -             179       -              -            -             -           179
Issuance of 7,550 restricted
  Class A Common shares                 -         -             201       -              -            -             (201)      -
Amortization of unearned restricted
  stock compensation                    -         -            -          -              -            -               50         50
Tax benefit on Class A stock
  options exercised                     -         -           4,256       -              -            -             -         4,256
Tax benefit on disposition of
  employee stock purchases              -         -              28       -              -            -             -            28
Other                                   -         -              51       -              -            -             -            51
                                     -------   -------   ----------  ---------  -------------   ----------  ------------  ---------

BALANCE, February 28, 2001           $   374   $    74   $  267,655  $ 455,798  $     (26,004)  $  (81,478) $       (151) $ 616,268
                                     =======   =======   ==========  =========  =============   ==========  ============  =========
<FN>
                The accompanying notes to consolidated financial statements are an integral part of these statements.
</FN>
</TABLE>

<PAGE>
                                     - 39 -
<TABLE>
                                  CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
                                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                 (in thousands)

<CAPTION>
                                                                             For the Years Ended
                                                                 --------------------------------------------
                                                                 February 28,    February 29,    February 28,
                                                                     2001            2000            1999
                                                                 ------------    ------------    ------------
<S>                                                              <C>             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                                     $     97,342    $     77,375    $     50,472

  Adjustments to reconcile net income to net cash
    provided by operating activities:
      Depreciation of property, plant and equipment                    44,613          40,892          27,282
      Extraordinary item, net of income taxes                            -               -             11,437
      Amortization of intangible assets                                25,770          23,831          11,308
      Deferred tax provision (benefit)                                  6,677          (1,500)         10,053
      Loss (gain) on sale of assets                                     2,356          (2,003)          1,193
      Amortization of discount on long-term debt                          503             427             388
      Stock-based compensation expense                                    280             856             144
      Change in operating assets and liabilities,
        net of effects from purchases of businesses:
          Accounts receivable, net                                    (27,375)        (10,812)         44,081
          Inventories, net                                            (57,126)          1,926           1,190
          Prepaid expenses and other current assets                    (6,443)          4,663         (14,115)
          Accounts payable                                            (11,354)        (17,070)        (17,560)
          Accrued excise taxes                                         26,519         (18,719)         17,124
          Other accrued expenses and liabilities                        4,333          44,184         (31,807)
          Other assets and liabilities, net                            (2,320)          4,005          (3,945)
                                                                 ------------    ------------    ------------
            Total adjustments                                           6,433          70,680          56,773
                                                                 ------------    ------------    ------------
            Net cash provided by operating activities                 103,775         148,055         107,245
                                                                 ------------    ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property, plant and equipment                          (68,217)        (57,747)        (49,857)
  Purchases of businesses, net of cash acquired                        (4,459)       (452,910)       (332,216)
  Proceeds from sale of assets                                          2,009          14,977             431
  Purchase of joint venture minority interest                            -               -               (716)
                                                                 ------------    ------------    ------------
            Net cash used in investing activities                     (70,667)       (495,680)       (382,358)
                                                                 ------------    ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of long-term debt                            319,400       1,486,240         635,090
  Exercise of employee stock options                                   13,806           3,358           4,083
  Proceeds from employee stock purchases                                1,547           1,428           1,840
  Principal payments of long-term debt                               (221,908)     (1,059,952)       (264,101)
  Net repayments of notes payable                                     (23,615)        (60,629)        (13,907)
  Payment of issuance costs of long-term debt                          (5,794)        (14,888)        (17,109)
  Purchases of treasury stock                                            -               -            (44,878)
                                                                 ------------    ------------    ------------
            Net cash provided by financing activities                  83,436         355,557         301,018
                                                                 ------------    ------------    ------------

Effect of exchange rate changes on cash and cash investments           (5,180)         (1,269)            508
                                                                 ------------    ------------    ------------

NET INCREASE IN CASH AND CASH INVESTMENTS                             111,364           6,663          26,413
CASH AND CASH INVESTMENTS, beginning of year                           34,308          27,645           1,232
                                                                 ------------    ------------    ------------
CASH AND CASH INVESTMENTS, end of year                           $    145,672    $     34,308    $     27,645
                                                                 ============    ============    ============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
  Cash paid during the year for:
    Interest                                                     $    105,644    $     95,004    $     35,869
                                                                 ============    ============    ============
    Income taxes                                                 $     54,427    $     35,478    $     40,714
                                                                 ============    ============    ============

SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING
  AND FINANCING ACTIVITIES:
    Fair value of assets acquired, including cash acquired       $     15,115    $    562,204    $    740,880
    Liabilities assumed                                               (10,656)       (106,805)       (382,759)
                                                                 ------------    ------------    ------------
    Cash paid                                                           4,459         455,399         358,121
    Less - cash acquired                                                 -             (2,489)        (25,905)
                                                                 ------------    ------------    ------------
    Net cash paid for purchases of businesses                    $      4,459    $    452,910    $    332,216
                                                                 ============    ============    ============
<FN>
    The accompanying notes to consolidated financial statements are an integral part of these statements.
</FN>
</TABLE>
<PAGE>
                                     - 40 -

                  CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                FEBRUARY 28, 2001

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

     DESCRIPTION OF BUSINESS -
     Constellation  Brands,  Inc. (formerly  Canandaigua  Brands,  Inc.) and its
subsidiaries (the "Company") operate primarily in the beverage alcohol industry.
The Company is a leader in the  production  and  marketing  of beverage  alcohol
brands in North America and the United Kingdom, and a leading independent drinks
wholesaler  in the United  Kingdom.  The  Company is the  largest  single-source
supplier of wine,  imported beer and distilled  spirits in the United States. In
the United Kingdom,  the Company is a leading  producer and marketer of wine and
cider.  The  Company's  products are  distributed  by more than 1,000  wholesale
distributors in North America.  In the United Kingdom,  the Company  distributes
its branded products and those of other companies to more than 16,500 customers.

     PRINCIPLES OF CONSOLIDATION -
     The consolidated  financial  statements of the Company include the accounts
of  Constellation  Brands,  Inc. and all of its  subsidiaries.  All intercompany
accounts and transactions have been eliminated.

     MANAGEMENT'S USE OF ESTIMATES AND JUDGMENT -
     The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

     FOREIGN CURRENCY TRANSLATION -
     The  "functional  currency" for  translating  the accounts of the Company's
operations  outside the U.S. is the local  currency.  The  translation  from the
applicable  foreign  currencies  to U.S.  dollars is performed for balance sheet
accounts  using current  exchange  rates in effect at the balance sheet date and
for revenue and expense  accounts using a weighted  average exchange rate during
the period. The resulting translation adjustments are recorded as a component of
accumulated other comprehensive  income.  Gains or losses resulting from foreign
currency  transactions  are  included  in selling,  general  and  administrative
expenses.

     CASH INVESTMENTS -
     Cash  investments  consist of highly  liquid  investments  with an original
maturity  when  purchased of three months or less and are stated at cost,  which
approximates  market value.  At February 28, 2001, cash  investments  consist of
investments  in commercial  paper of $141.0  million,  which were  classified as
held-to-maturity. The amounts at February 29, 2000, were not significant.

     FAIR VALUE OF FINANCIAL INSTRUMENTS -
     To meet the  reporting  requirements  of Statement of Financial  Accounting
Standards No. 107, "Disclosures about Fair Value of Financial  Instruments," the
Company  calculates the fair value of financial  instruments using quoted market
prices  whenever  available.  When quoted market prices are not  available,  the
Company uses standard pricing models for various types of financial  instruments
(such as  forwards,  options,  swaps,  etc.) which take into account the present
value of  estimated  future cash flows.  The  methods  and  assumptions  used to
estimate the fair value of financial instruments are summarized as follows:

<PAGE>
                                     - 41 -

     ACCOUNTS RECEIVABLE: The carrying amount approximates fair value due to the
short maturity of these instruments,  the  creditworthiness of the customers and
the large number of customers  constituting  the  accounts  receivable  balance.
     NOTES PAYABLE:  These  instruments are variable interest rate bearing notes
for which the carrying value approximates the fair value.
     LONG-TERM  DEBT: The carrying value of the debt  facilities with short-term
variable interest rates approximates the fair value. The fair value of the fixed
rate debt was estimated by discounting cash flows using interest rates currently
available for debt with similar terms and maturities.
     FOREIGN  EXCHANGE  HEDGING  AGREEMENTS:  The fair value of currency forward
contracts is estimated  based on quoted  market  prices.
     LETTERS OF CREDIT: At February 28, 2001, and February 29, 2000, the Company
had letters of credit  outstanding  totaling  $12.3  million and $10.8  million,
respectively,  which  guarantee  payment  for certain  obligations.  The Company
recognizes  expense on these  obligations as incurred and no material losses are
anticipated.

     The carrying  amount and estimated  fair value of the  Company's  financial
instruments are summarized as follows:

<TABLE>
<CAPTION>
                                             February 28, 2001                          February 29, 2000
                                   ---------------------------------------   -------------------------------------
                                    Notional      Carrying        Fair        Notional    Carrying        Fair
                                     Amount        Amount         Value        Amount      Amount         Value
                                   ----------    -----------   -----------   ----------  -----------   -----------
(in thousands)
<S>                                <C>           <C>           <C>           <C>         <C>           <C>
Liabilities:
-----------
Notes payable                      $     -       $     4,184   $     4,184   $     -     $    28,134   $    28,134
Long-term debt, including
  current portion                  $     -       $ 1,361,613   $ 1,380,050   $     -     $ 1,289,788   $ 1,254,090

Derivative Instruments:
----------------------
Foreign exchange hedging
  agreements:
    Currency forward contracts     $    7,250    $      -      $       353   $    6,895  $      -      $      (125)

</TABLE>

     INTEREST RATE FUTURES AND CURRENCY FORWARD CONTRACTS -
     From time to time,  the Company  enters into  interest  rate  futures and a
variety of currency  forward  contracts in the  management of interest rate risk
and foreign currency transaction  exposure.  The Company has limited involvement
with  derivative  instruments  and does not use them for trading  purposes.  The
Company uses  derivatives  solely to reduce the financial  impact of the related
risks.  Unrealized  gains and losses on interest  rate  futures are deferred and
recognized  as a  component  of  interest  expense  over the  borrowing  period.
Unrealized  gains and losses on currency  forward  contracts  are  deferred  and
recognized  as a  component  of the  related  transactions  in the  accompanying
financial  statements.  Discounts or premiums on currency forward  contracts are
recognized over the life of the contract. Cash flows from derivative instruments
are classified in the same category as the item being hedged. The Company's open
currency  forward  contracts at February 28, 2001,  hedge  purchase  commitments
denominated in foreign currencies and mature within twelve months.

     INVENTORIES -
     Inventories  are stated at the lower of cost  (computed in accordance  with
the first-in,  first-out method) or market.  Elements of cost include materials,
labor and overhead and consist of the following:

                                            February 28,       February 29,
                                                2001               2000
                                            ------------       ------------
(in thousands)
Raw materials and supplies                  $     28,007       $     29,417
In-process inventories                           450,650            419,558
Finished case goods                              191,361            166,725
                                            ------------       ------------
                                            $    670,018       $    615,700
                                            ============       ============

<PAGE>
                                     - 42 -

     A  substantial  portion of  barreled  whiskey  and brandy  will not be sold
within one year  because of the  duration  of the aging  process.  All  barreled
whiskey and brandy are classified as in-process  inventories and are included in
current assets, in accordance with industry practice.  Bulk wine inventories are
also included as in-process  inventories  within current  assets,  in accordance
with the  general  practices  of the wine  industry,  although a portion of such
inventories  may be  aged  for  periods  greater  than  one  year.  Warehousing,
insurance,  ad valorem taxes and other carrying  charges  applicable to barreled
whiskey and brandy held for aging are included in inventory costs.

     PROPERTY, PLANT AND EQUIPMENT -
     Property,  plant  and  equipment  is stated at cost.  Major  additions  and
betterments are charged to property accounts,  while maintenance and repairs are
charged to  operations  as incurred.  The cost of  properties  sold or otherwise
disposed of and the related  accumulated  depreciation  are eliminated  from the
accounts at the time of disposal and resulting  gains and losses are included as
a component of operating income.

     DEPRECIATION -
     Depreciation is computed primarily using the straight-line  method over the
following estimated useful lives:

                                               Depreciable Life in Years
                                               -------------------------
      Buildings and improvements                     10 to 33 1/3
      Machinery and equipment                         3 to 15
      Motor vehicles                                  3 to 7

     Amortization  of assets  capitalized  under capital leases is included with
depreciation expense.  Amortization is calculated using the straight-line method
over the shorter of the estimated useful life of the asset or the lease term.

     OTHER ASSETS -
     Other assets, which consist of goodwill,  distribution rights,  trademarks,
agency license  agreements,  deferred financing costs,  prepaid pension benefits
and  other  amounts,  are  stated  at  cost,  net of  accumulated  amortization.
Amortization is calculated on a straight-line  or effective  interest basis over
the following estimated useful lives:

                                                 Useful Life in Years
                                                 --------------------
      Goodwill                                           40
      Distribution rights                                40
      Trademarks                                         40
      Agency license agreements                       16 to 40
      Deferred financing costs                         5 to 10

     At February 28, 2001,  the weighted  average useful life of these assets is
36.3 years.

     LONG-LIVED  ASSETS AND  INTANGIBLES -
     In accordance  with  Statement of Financial  Accounting  Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be  Disposed  of,"  the  Company  reviews  its  long-lived  assets  and  certain
identifiable   intangibles   for  impairment   whenever  events  or  changes  in
circumstances  indicate  that  the  carrying  amount  of an  asset  may  not  be
recoverable  on an  undiscounted  cash flow basis.  The statement  also requires
that,   when  an  impairment  has  occurred,   long-lived   assets  and  certain
identifiable  intangibles to be disposed of be reported at the lower of carrying
amount or fair value  less cost to sell.  The  Company  did not record any asset
impairment in Fiscal 2001.

<PAGE>
                                     - 43 -

     ADVERTISING AND PROMOTION COSTS -
     The Company generally expenses advertising and promotion costs as incurred,
shown or  distributed.  Prepaid  advertising  costs at February  28,  2001,  and
February 29, 2000, were not material.  Advertising and promotion expense for the
years ended February 28, 2001,  February 29, 2000,  and February 28, 1999,  were
$264.4 million, $279.6 million, and $173.1 million, respectively.

     INCOME  TAXES -
     The Company uses the liability  method of accounting for income taxes.  The
liability method accounts for deferred income taxes by applying  statutory rates
in effect at the balance  sheet date to the  difference  between  the  financial
reporting and tax basis of assets and liabilities.

     ENVIRONMENTAL -
     Environmental  expenditures that relate to current  operations are expensed
as appropriate. Expenditures that relate to an existing condition caused by past
operations, and which do not contribute to current or future revenue generation,
are expensed.  Liabilities are recorded when  environmental  assessments  and/or
remedial  efforts  are  probable,  and the  cost  can be  reasonably  estimated.
Generally,  the timing of these  accruals  coincides  with the  completion  of a
feasibility  study  or the  Company's  commitment  to a formal  plan of  action.
Liabilities for environmental  costs were not material at February 28, 2001, and
February 29, 2000.

     COMPREHENSIVE INCOME -
     During fiscal 1999, the Company adopted  Statement of Financial  Accounting
Standards No. 130,  "Reporting  Comprehensive  Income"  ("SFAS No.  130").  This
statement  establishes  rules for the reporting of comprehensive  income and its
components.  Comprehensive  income  consists of net income and foreign  currency
translation  adjustments  and is presented  in the  Consolidated  Statements  of
Changes in Stockholders'  Equity.  The adoption of SFAS No. 130 had no impact on
total stockholders' equity.

     EARNINGS PER COMMON SHARE -
     Basic  earnings  per  common  share  excludes  the  effect of common  stock
equivalents and is computed by dividing income available to common  stockholders
by the weighted  average number of common shares  outstanding  during the period
for Class A Common Stock and Class B Convertible Common Stock.  Diluted earnings
per common share reflects the potential dilution that could result if securities
or other contracts to issue common stock were exercised or converted into common
stock.  Diluted  earnings per common share assumes the exercise of stock options
using the  treasury  stock  method and assumes  the  conversion  of  convertible
securities, if any, using the "if converted" method.

     COMMON STOCK SPLIT -
     On April 10,  2001,  the  Board of  Directors  of the  Company  approved  a
two-for-one  stock split of both the Company's  Class A Common Stock and Class B
Convertible  Common  Stock,  which  will be  distributed  in the form of a stock
dividend on May 14, 2001, to stockholders of record on April 30, 2001. All share
and per share  amounts  have been  retroactively  restated to give effect to the
common stock split.

     OTHER -
     Certain Fiscal 2000 balances have been  reclassified  to conform to current
year presentation.

<PAGE>
                                     - 44 -

2.   ACQUISITIONS:

     MATTHEW CLARK ACQUISITION -
     On December  1, 1998,  the Company  acquired  control of Matthew  Clark plc
("Matthew  Clark") and as of February  28,  1999,  had  acquired  all of Matthew
Clark's outstanding shares (the "Matthew Clark Acquisition"). The total purchase
price,  including  assumption of  indebtedness,  for the  acquisition of Matthew
Clark  shares was  $484.8  million,  net of cash  acquired.  Matthew  Clark is a
leading  producer and  distributor of its own brands of cider,  wine and bottled
water and a leading independent drinks wholesaler in the United Kingdom.

     The purchase  price for the Matthew  Clark shares was funded with  proceeds
from loans under the Company's prior senior credit  facility.  The Matthew Clark
Acquisition  was  accounted  for using the  purchase  method;  accordingly,  the
Matthew  Clark  assets  were  recorded  at  fair  market  value  at the  date of
acquisition,  December  1,  1998.  The  excess of the  purchase  price  over the
estimated fair market value of the net assets acquired (goodwill),  (pound)108.5
million  ($179.5  million as of  December  1,  1998),  is being  amortized  on a
straight-line  basis over 40 years.  The  results of  operations  of the Matthew
Clark  Acquisition have been included in the  Consolidated  Statements of Income
since the date of acquisition.

     The Company incurred an extraordinary  loss of $19.3 million ($11.4 million
after taxes) in the fourth  quarter of 1999  resulting  from fees related to the
replacement of the existing bank credit agreement,  including  extinguishment of
the Term Loan, in conjunction with the Matthew Clark Acquisition.

     BLACK VELVET ASSETS ACQUISITION -
     On April 9, 1999, in an asset  acquisition,  the Company  acquired  several
well-known Canadian whisky brands, including Black Velvet, production facilities
located in Alberta and Quebec,  Canada,  case goods and bulk whisky  inventories
and other  related  assets  from  affiliates  of Diageo plc (the  "Black  Velvet
Assets").  In  connection  with the  transaction,  the Company also entered into
multi-year  agreements  with  affiliates of Diageo plc to provide  packaging and
distilling  services for various brands  retained by the Diageo plc  affiliates.
The purchase  price was $183.6 million and was financed by the proceeds from the
sale of the Senior Subordinated Notes (as defined in Note 6).

     The Black Velvet  Assets  acquisition  was accounted for using the purchase
method;  accordingly,  the acquired assets were recorded at fair market value at
the date of  acquisition.  The excess of the purchase  price over the  estimated
fair market value of the net assets acquired (goodwill), $36.0 million, is being
amortized on a straight-line  basis over 40 years.  The results of operations of
the Black  Velvet  Assets  acquisition  have been  included in the  Consolidated
Statements of Income since the date of acquisition.

     FRANCISCAN AND SIMI ACQUISITIONS -
     On June 4, 1999, the Company purchased all of the outstanding capital stock
of  Franciscan   Vineyards,   Inc.   ("Franciscan   Estates")  and,  in  related
transactions,  purchased vineyards,  equipment and other vineyard related assets
located in Northern California (collectively, the "Franciscan Acquisition"). The
purchase  price was  $212.4  million  in cash  plus  assumed  debt,  net of cash
acquired,  of $30.8  million.  The  purchase  price was  financed  primarily  by
additional term loan borrowings under the senior credit facility.  Also, on June
4, 1999,  the Company  acquired  all of the  outstanding  capital  stock of Simi
Winery,  Inc.  ("Simi") (the "Simi  Acquisition").  The cash purchase  price was
$57.5  million and was financed by revolving  loan  borrowings  under the senior
credit  facility.  The purchases were  accounted for using the purchase  method;
accordingly,  the acquired assets were recorded at fair market value at the date
of acquisition.  The excess of the purchase price over the estimated fair market
value of the net assets acquired  (goodwill) for the Franciscan  Acquisition and
the Simi  Acquisition,  $94.5 million and $5.8 million,  respectively,  is being
amortized on a straight-line basis over 40 years. The Franciscan Estates

<PAGE>
                                     - 45 -

and Simi operations are managed  together as a separate  business segment of the
Company  ("Franciscan").  The  results of  operations  of  Franciscan  have been
included in the Consolidated Statements of Income since the date of acquisition.

     FORTH WINES ACQUISITION -
     On October 27,  2000,  the  Company  purchased  all of the issued  Ordinary
Shares  and  Preference  Shares of Forth  Wines  Limited  ("Forth  Wines").  The
purchase  price was $4.5  million and was financed  through cash from  operating
activities.   The  purchase  was  accounted  for  using  the  purchase   method;
accordingly,  the acquired assets were recorded at fair market value at the date
of acquisition.  The excess of the purchase price over the estimated fair market
value of the net assets acquired (goodwill), $2.2 million, is being amortized on
a  straight-line  basis over 40 years.  The results of operations of Forth Wines
have been  included in the  Consolidated  Statements of Income since the date of
acquisition.

     The following table sets forth unaudited pro forma results of operations of
the Company for the fiscal years ended February 28, 2001, and February 29, 2000.
The  unaudited  pro forma  results  of  operations  for the fiscal  years  ended
February  28, 2001,  and February 29, 2000,  do not give pro forma effect to the
acquisition  of Forth  Wines as if it  occurred  on March 1, 1999,  as it is not
significant.  The unaudited  pro forma results of operations  give effect to the
acquisitions  of the Black Velvet  Assets and  Franciscan as if they occurred on
March 1, 1999. The unaudited pro forma results of operations are presented after
giving effect to certain adjustments for depreciation, amortization of goodwill,
interest  expense on the  acquisition  financing and related income tax effects.
The  unaudited  pro forma  results of  operations  for Fiscal 2000 (shown in the
table below),  reflect total  nonrecurring  charges of $12.4 million  ($0.20 per
share on a diluted basis) related to transaction  costs,  primarily for exercise
of stock  options,  which  were  incurred  by  Franciscan  Estates  prior to the
acquisition.

     The  unaudited pro forma  results of  operations  are based upon  currently
available information and upon certain assumptions that the Company believes are
reasonable  under  the  circumstances.   The  unaudited  pro  forma  results  of
operations  do not purport to present what the  Company's  results of operations
would actually have been if the aforementioned transactions had in fact occurred
on such date or at the  beginning of the period  indicated,  nor do they project
the Company's  financial position or results of operations at any future date or
for any future period.

                                                 February 28,      February 29,
                                                     2001              2000
                                                 ------------      ------------
(in thousands, except per share data)
Net sales                                        $  2,396,685      $  2,367,833
Income before income taxes                       $    162,237      $    113,779
Net income                                       $     97,342      $     68,267

Earnings per common share:
  Basic                                          $       2.65      $       1.89
                                                 ============      ============
  Diluted                                        $       2.60      $       1.85
                                                 ============      ============

Weighted average common shares outstanding:
  Basic                                                36,723            36,108
  Diluted                                              37,375            36,998

<PAGE>
                                     - 46 -

3.   PROPERTY, PLANT AND EQUIPMENT:

     The major components of property, plant and equipment are as follows:

                                            February 28,       February 29,
                                                2001               2000
                                            ------------       ------------
(in thousands)
Land                                        $     82,976       $     62,871
Vineyards                                         47,227             37,756
Buildings and improvements                       140,349            131,588
Machinery and equipment                          455,197            440,008
Motor vehicles                                     9,190              7,241
Construction in progress                          18,347             27,874
                                            ------------       ------------
                                                 753,286            707,338
Less - Accumulated depreciation                 (204,672)          (164,367)
                                            ------------       ------------
                                            $    548,614       $    542,971
                                            ============       ============

4.   OTHER ASSETS:

     The major components of other assets are as follows:

                                             February 28,      February 29,
                                                 2001              2000
                                             ------------      ------------
(in thousands)
Goodwill                                     $    447,813      $    463,577
Trademarks                                        247,139           253,148
Distribution rights and agency
  license agreements                               87,052            87,052
Other                                              73,935            64,504
                                             ------------      ------------
                                                  855,939           868,281
Less - Accumulated amortization                   (83,373)          (58,458)
                                             ------------      ------------
                                             $    772,566      $    809,823
                                             ============      ============

5.   OTHER ACCRUED EXPENSES AND LIABILITIES:

     The major  components  of other  accrued  expenses and  liabilities  are as
follows:

                                             February 28,      February 29,
                                                 2001              2000
                                             ------------      ------------
(in thousands)
Accrued advertising and promotions           $     44,501      $     37,083
Accrued interest                                   28,542            24,757
Accrued salaries and commissions                   24,589            23,850
Accrued income taxes payable                       21,122            24,093
Other                                              79,299            94,988
                                             ------------      ------------
                                             $    198,053      $    204,771
                                             ============      ============

<PAGE>
                                     - 47 -

6.   BORROWINGS:

     Borrowings consist of the following:

<TABLE>
<CAPTION>
                                                                                                 February 29,
                                                            February 28, 2001                         2000
                                            -----------------------------------------------      ------------
                                               Current         Long-term          Total              Total
                                            ------------     ------------      ------------      ------------
(in thousands)
<S>                                         <C>              <C>               <C>               <C>
Notes Payable:
-------------
  Senior Credit Facility -
    Revolving Credit Loans                  $       -        $       -         $       -         $     26,800
  Other                                            4,184             -                4,184             1,334
                                            ------------     ------------      ------------      ------------
                                            $      4,184     $       -         $      4,184      $     28,134
                                            ============     ============      ============      ============

Long-term Debt:
--------------
  Senior Credit Facility - Term Loans       $     49,218     $    288,377      $    337,595      $    570,050
  Senior Notes                                      -             623,507           623,507           318,433
  Senior Subordinated Notes                         -             393,418           393,418           392,947
  Other Long-term Debt                             4,958            2,135             7,093             8,358
                                            ------------     ------------      ------------      ------------
                                            $     54,176     $  1,307,437      $  1,361,613      $  1,289,788
                                            ============     ============      ============      ============
</TABLE>

     SENIOR CREDIT FACILITY -
     On  October 6,  1999,  the  Company,  certain  of its  principal  operating
subsidiaries  and a syndicate of banks (the  "Syndicate  Banks"),  for which The
Chase Manhattan Bank acts as administrative  agent, entered into a senior credit
facility (as subsequently amended, the "2000 Credit Agreement"). The 2000 Credit
Agreement  includes both U.S.  dollar and British pound sterling  commitments of
the Syndicate  Banks of up to, in the aggregate,  the equivalent of $1.0 billion
(subject to increase as therein provided to $1.2 billion).  Proceeds of the 2000
Credit  Agreement  were  used to repay all  outstanding  principal  and  accrued
interest on all loans under the Company's prior senior credit facility,  and are
available to fund permitted  acquisitions  and ongoing  working capital needs of
the Company and its subsidiaries.

     The 2000 Credit Agreement provides for a $380.0 million Tranche I Term Loan
facility due in December  2004, a $320.0  million  Tranche II Term Loan facility
available for borrowing in British pound  sterling due in December  2004,  and a
$300.0 million  Revolving Credit facility  (including  letters of credit up to a
maximum of $20.0  million)  which expires in December  2004.  The Tranche I Term
Loan  facility   ($380.0   million)  and  the  Tranche  II  Term  Loan  facility
((pound)193.4  million,  or $320.0 million) were fully drawn at closing.  During
Fiscal 2001,  the Company used  proceeds from  operating  activities to prepay a
portion  of  the  $380.0  million  Tranche  I Term  Loan  facility.  After  this
prepayment,  the  required  quarterly  repayments  of the  Tranche  I Term  Loan
facility  were  revised to $15.6  million  starting in June 2001 and  increasing
thereafter  annually  with final  payments of $20.6  million in each  quarter in
2004. On November 17, 1999,  proceeds from the Sterling Senior Notes (as defined
below) were used to repay a portion of the $320.0  million  Tranche II Term Loan
facility  ((pound)73.0  million,  or $118.3 million).  On May 15, 2000, proceeds
from the Sterling Series C Senior Notes (as defined below) were used to repay an
additional  portion  of  the  $320.0  million  Tranche  II  Term  Loan  facility
((pound)78.8 million, or $118.2 million).  After these repayments,  the required
quarterly  repayments  of the  Tranche  II Term Loan  facility  were  revised to
(pound)0.4 million ($0.6 million) for each quarter in 2001 and 2002,  (pound)0.5
million ($0.7 million) for each quarter in 2003,  and (pound)8.5  million ($12.3
million) for each quarter in 2004 (the foregoing U.S. dollar  equivalents are as
of February  28,  2001).  There are  certain  mandatory  term loan  prepayments,
including those based on sale of assets and issuance of debt and equity, in each
case subject to customary baskets, exceptions and thresholds.

<PAGE>
                                     - 48 -

     The rate of interest payable, at the Company's option, is a function of the
London interbank offering rate ("LIBOR") plus a margin,  federal funds rate plus
a margin,  or the prime rate plus a margin.  The margin is adjustable based upon
the  Company's  Debt Ratio (as defined in the 2000 Credit  Agreement)  and, with
respect to LIBOR borrowings, ranges between 0.75% and 1.25% for Revolving Credit
loans and 1.00% and 1.75% for Term Loans.  As of February 28,  2001,  the margin
was 1.125% for Revolving  Credit loans and 1.625% for Term Loans. In addition to
interest, the Company pays a facility fee on the Revolving Credit commitments at
0.50% per annum as of February  28, 2001.  This fee is based upon the  Company's
quarterly Debt Ratio and can range from 0.25% to 0.50%.

     Certain of the Company's principal  operating  subsidiaries have guaranteed
the  Company's  obligations  under the 2000  Credit  Agreement.  The 2000 Credit
Agreement is secured by (i) first priority  pledges of 100% of the capital stock
of Canandaigua Limited and all of the Company's domestic operating  subsidiaries
and (ii) first priority pledges of 65% of the capital stock of Matthew Clark and
certain other foreign subsidiaries.

     The Company and its subsidiaries are subject to customary lending covenants
including those restricting additional liens, incurring additional indebtedness,
the sale of assets,  the payment of dividends,  transactions with affiliates and
the making of certain  investments,  in each case subject to customary  baskets,
exceptions  and  thresholds.   The  primary  financial   covenants  require  the
maintenance  of a debt coverage  ratio,  a senior debt coverage  ratio,  a fixed
charges  ratio  and an  interest  coverage  ratio.  Among  the most  restrictive
covenants contained in the 2000 Credit Agreement is the debt coverage ratio.

     On February 13, 2001, the 2000 Credit Agreement was amended to, among other
things,  permit the  Company  to  finance  the  acquisition  of the Turner  Road
Vintners  Assets with revolving loan  borrowings,  permit the refinancing of the
Original  Notes (as defined  below) and Series C Notes (as  defined  below) with
senior notes, and adjust the senior debt coverage ratio covenant.

     As of February 28, 2001, under the 2000 Credit  Agreement,  the Company had
outstanding  term loans of $337.6 million  bearing a weighted  average  interest
rate of 8.2% and no outstanding  revolving loans.  Amounts available to be drawn
down under the Revolving  Credit Loans were $287.7 million and $262.5 million at
February 28, 2001, and February 29, 2000, respectively.  The Company had average
outstanding  Revolving Credit Loans of $47.6 million,  $73.0 million,  and $75.5
million for the years ended  February 28, 2001,  February 29, 2000, and February
28, 1999, respectively.  The average interest rate on the Revolving Credit Loans
was 7.8%,  7.4%,  and 6.2% for  Fiscal  2001,  Fiscal  2000,  and  Fiscal  1999,
respectively.

     SENIOR NOTES -
     On August 4, 1999, the Company issued $200.0  million  aggregate  principal
amount of 8 5/8% Senior Notes due August 2006 (the "August 1999 Senior  Notes").
The net proceeds of the offering  ($196.0  million) were used to repay a portion
of the Company's  borrowings under its senior credit  facility.  Interest on the
August 1999 Senior Notes is payable  semiannually  on February 1 and August 1 of
each  year,  beginning  February  1,  2000.  The August  1999  Senior  Notes are
redeemable at the option of the Company,  in whole or in part, at any time.  The
August 1999 Senior Notes are unsecured  senior  obligations  and rank equally in
right of payment to all existing and future unsecured senior indebtedness of the
Company.  The August 1999 Senior Notes are  guaranteed,  on a senior  basis,  by
certain of the Company's significant operating subsidiaries.

     On November  17,  1999,  the Company  issued  (pound)75.0  million  ($121.7
million upon  issuance)  aggregate  principal  amount of 8 1/2% Senior Notes due
November 2009 (the "Sterling  Senior  Notes").  The net proceeds of the offering
((pound)73.0  million,  or $118.3  million)  were used to repay a portion of the
Company's  British pound sterling  borrowings  under its senior credit facility.
Interest on the  Sterling  Senior  Notes is payable  semiannually  on May 15 and
November 15 of each year, beginning on May 15,

<PAGE>
                                     - 49 -

2000. The Sterling Senior Notes are redeemable at the option of the Company,  in
whole or in part, at any time.  The Sterling  Senior Notes are unsecured  senior
obligations  and rank  equally in right of payment  to all  existing  and future
unsecured  senior  indebtedness  of the Company.  The Sterling  Senior Notes are
guaranteed, on a senior basis, by certain of the Company's significant operating
subsidiaries. In March 2000, the Company exchanged (pound)75.0 million aggregate
principal  amount  of 8 1/2%  Series B Senior  Notes due in  November  2009 (the
"Sterling  Series B Senior  Notes") for all of the Sterling  Senior  Notes.  The
terms of the  Sterling  Series B Senior  Notes  are  identical  in all  material
respects to the Sterling  Senior Notes.  In October 2000, the Company  exchanged
(pound)74.0 million aggregate principal amount of Sterling Series C Senior Notes
(as defined below) for (pound)74.0  million of the Sterling Series B Notes.  The
terms of the  Sterling  Series C Senior  Notes  are  identical  in all  material
respects to the Sterling  Series B Senior  Notes.  As of February 28, 2001,  the
Company had outstanding  (pound)1.0 million ($1.4 million)  aggregate  principal
amount of Sterling Series B Senior Notes.

     On May 15, 2000, the Company issued  (pound)80.0  million  ($120.0  million
upon issuance)  aggregate  principal  amount of 8 1/2% Series C Senior Notes due
November 2009 at an issuance price of (pound)79.6  million  ($119.4 million upon
issuance,  net of $0.6 million unamortized discount,  with an effective interest
rate of 8.6%) (the "Sterling  Series C Senior  Notes").  The net proceeds of the
offering  ((pound)78.8  million, or $118.2 million) were used to repay a portion
of the  Company's  British  pound  sterling  borrowings  under its senior credit
facility. Interest on the Sterling Series C Senior Notes is payable semiannually
on May 15 and November 15 of each year,  beginning  on November  15,  2000.  The
Sterling  Series C Senior Notes are redeemable at the option of the Company,  in
whole or in part, at any time. The Sterling  Series C Senior Notes are unsecured
senior  obligations  and rank  equally in right of payment to all  existing  and
future  unsecured  senior  indebtedness  of the Company.  The Sterling  Series C
Senior Notes are  guaranteed,  on a senior  basis,  by certain of the  Company's
significant  operating  subsidiaries.  As of February 28, 2001,  the Company had
outstanding  (pound)  154.0  million  ($222.1  million,   net  of  $0.5  million
unamortized  discount)  aggregate  principal  amount of Sterling Series C Senior
Notes.

     On February 21, 2001, the Company issued $200.0 million aggregate principal
amount of 8% Senior Notes due February 2008 (the "February 2001 Senior  Notes").
The net proceeds of the offering  ($197.0  million) were used to partially  fund
the  acquisition  of the Turner Road  Vintners  Assets (see Note 18 - Subsequent
Events).  Interest on the February 2001 Senior Notes is payable  semiannually on
February 15 and August 15 of each year,  beginning August 15, 2001. The February
2001 Senior Notes are  redeemable  at the option of the Company,  in whole or in
part,  at any  time.  The  February  2001  Senior  Notes  are  unsecured  senior
obligations  and rank  equally in right of payment  to all  existing  and future
unsecured senior indebtedness of the Company. The February 2001 Senior Notes are
guaranteed, on a senior basis, by certain of the Company's significant operating
subsidiaries.

     SENIOR SUBORDINATED NOTES -
     On December 27, 1993, the Company issued $130.0 million aggregate principal
amount of 8 3/4% Senior  Subordinated  Notes due in December 2003 (the "Original
Notes").  Interest on the Original Notes is payable  semiannually on June 15 and
December 15 of each year. The Original Notes are unsecured and  subordinated  to
the prior  payment  in full of all senior  indebtedness  of the  Company,  which
includes the senior credit  facility.  The Original Notes are  guaranteed,  on a
senior  subordinated  basis, by certain of the Company's  significant  operating
subsidiaries.

     On October 29, 1996, the Company issued $65.0 million  aggregate  principal
amount of 8 3/4% Series B Senior Subordinated Notes ($63.4 million,  net of $1.6
million  unamortized  discount,  with an effective  interest  rate of 9.8% as of
February  28,  2001) due in December  2003 (the  "Series B Notes").  In February
1997, the Company exchanged $65.0 million  aggregate  principal amount of 8 3/4%
Series C Senior  Subordinated  Notes due in December 2003 (the "Series C Notes")
for the  Series  B Notes.  The  terms of the  Series C Notes  are  substantially
identical in all material respects to the Original Notes.

<PAGE>
                                     - 50 -

     On March 4, 1999,  the Company issued $200.0  million  aggregate  principal
amount of 8 1/2% Senior Subordinated Notes due March 2009 ("Senior  Subordinated
Notes"). The net proceeds of the offering ($195.0 million) were used to fund the
acquisition of the Black Velvet Assets and to pay the fees and expenses  related
thereto  with the  remainder  of the net  proceeds  used for  general  corporate
purposes.  Interest on the Senior Subordinated Notes is payable  semiannually on
March 1 and September 1 of each year,  beginning  September 1, 1999.  The Senior
Subordinated  Notes are redeemable at the option of the Company,  in whole or in
part,  at any time on or after March 1, 2004.  The Company may also redeem up to
$70.0  million of the Senior  Subordinated  Notes using the  proceeds of certain
equity offerings  completed before March 1, 2002. The Senior  Subordinated Notes
are  unsecured  and  subordinated  to the prior  payment  in full of all  senior
indebtedness  of the Company,  which  includes the senior credit  facility.  The
Senior  Subordinated Notes are guaranteed,  on a senior  subordinated  basis, by
certain of the Company's significant operating subsidiaries.

     TRUST INDENTURES -
     The  Company's  various Trust  Indentures  relating to the senior notes and
senior subordinated notes contain certain covenants,  including, but not limited
to: (i)  limitation on  indebtedness;  (ii)  limitation on restricted  payments;
(iii)  limitation on  transactions  with  affiliates;  (iv) limitation on senior
subordinated  indebtedness;  (v) limitation on liens; (vi) limitation on sale of
assets;   (vii)  limitation  on  issuance  of  guarantees  of  and  pledges  for
indebtedness;  (viii)  restriction  on transfer of assets;  (ix)  limitation  on
subsidiary  capital stock;  (x) limitation on the creation of any restriction on
the  ability  of the  Company's  subsidiaries  to make  distributions  and other
payments;  and (xi) restrictions on mergers,  consolidations and the transfer of
all or  substantially  all of the assets of the Company to another  person.  The
limitation on indebtedness  covenant is governed by a rolling four quarter fixed
charge ratio requiring a specified minimum.

     DEBT PAYMENTS -
     Principal  payments  required under long-term debt  obligations  (excluding
unamortized  discount)  during the next five fiscal years and  thereafter are as
follows:

                     (in thousands)
                     2002               $     58,360
                     2003                     75,183
                     2004                    278,429
                     2005                    131,392
                     2006                         99
                     Thereafter              824,462
                                        ------------
                                        $  1,367,925
                                        ============

7.   INCOME TAXES:

     The Company  provides for income taxes under the provisions of SFAS No. 109
"Accounting  for Income  Taxes".  SFAS No. 109  requires an asset and  liability
based approach to accounting for income taxes.

     Deferred income taxes reflect the temporary  difference  between assets and
liabilities  recognized for financial  reporting and such amounts recognized for
tax purposes.

<PAGE>
                                     - 51 -

     The income tax provision consisted of the following:

                                             For the Years Ended
                                ---------------------------------------------
                                February 28,     February 29,    February 28,
                                    2001             2000            1999
                                ------------     ------------    ------------
(in thousands)
Current:
  Federal                       $     39,082     $     38,588    $    23,827
  State                                7,934            6,091          8,539
  Foreign                             11,202            8,405            102
                                ------------     ------------    -----------
    Total current                     58,218           53,084         32,468

Deferred:
  Federal                             (2,017)         (10,804)         5,732
  State                                  402            2,874          2,195
  Foreign                              8,292            6,430          2,126
                                ------------     ------------    -----------
    Total deferred                     6,677           (1,500)        10,053
                                ------------     ------------    -----------

Income tax provision            $     64,895     $     51,584    $    42,521
                                ============     ============    ===========

     The foreign provision for income taxes is based on foreign pretax earnings.
Earnings of foreign  subsidiaries  would be subject to U.S.  income  taxation on
repatriation to the U.S. The Company's  consolidated  financial statements fully
provide for any related tax liability on amounts that may be repatriated.

     Deferred tax assets and  liabilities  reflect the future income tax effects
of temporary  differences between the consolidated  financial statement carrying
amounts of existing assets and  liabilities  and their  respective tax bases and
are measured using enacted tax rates that apply to taxable income.

     Significant  components of deferred tax (liabilities) assets consist of the
following:

                                                 February 28,      February 29,
                                                     2001              2000
                                                 ------------      ------------
(in thousands)
Depreciation and amortization                    $   (140,864)     $   (127,436)
Effect of change in accounting method                  (7,928)          (11,200)
Inventory reserves                                     (5,791)           (4,542)
Insurance accruals                                      4,964             3,868
Restructuring                                           4,292             6,824
Other accruals                                         13,995            11,136
                                                 ------------      ------------
                                                 $   (131,332)     $   (121,350)
                                                 ============      ============

<PAGE>
                                     - 52 -

     A  reconciliation  of the total tax  provision  to the amount  computed  by
applying the statutory U.S.  Federal income tax rate to income before  provision
for income taxes is as follows:

<TABLE>
<CAPTION>
                                                                   For the Years Ended
                                         ----------------------------------------------------------------------
                                             February 28,             February 29,            February 28,
                                                 2001                     2000                    1999
                                         ---------------------    ---------------------   ---------------------
                                                        % of                     % of                    % of
                                                       Pretax                   Pretax                  Pretax
                                           Amount      Income       Amount      Income      Amount      Income
                                         ---------   ---------    ---------   ---------   ---------   ---------
(in thousands)
<S>                                      <C>              <C>     <C>              <C>    <C>              <C>
Income tax provision at statutory rate   $  56,783        35.0    $  45,136        35.0   $  36,551        35.0
State and local income taxes, net of
  federal income tax benefit                 5,022         3.1        3,077         2.4       6,977         6.7
Earnings of subsidiaries taxed at
  other than U.S. statutory rate               616         0.4        1,294         1.0         227         0.2
Miscellaneous items, net                     2,474         1.5        2,077         1.6      (1,234)       (1.2)
                                         ---------   ---------    ---------   ---------   ---------   ---------
                                         $  64,895        40.0    $  51,584        40.0   $  42,521        40.7
                                         =========   =========    =========   =========   =========   =========
</TABLE>

     At February  28,  2001,  the Company has U.S.  Federal net  operating  loss
carryforwards (NOL) of $0.9 million to offset future taxable income that, if not
otherwise utilized, will expire during fiscal 2011.

8.   PROFIT SHARING AND RETIREMENT SAVINGS PLANS:

     The Company's retirement and profit sharing plan, the Constellation Brands,
Inc.  401(k) and Profit  Sharing Plan (the  "Plan"),  covers  substantially  all
employees, excluding those employees covered by collective bargaining agreements
and Matthew Clark  employees.  The 401(k)  portion of the Plan permits  eligible
employees to defer a portion of their compensation (as defined in the Plan) on a
pretax basis.  Participants  may defer up to 12% of their  compensation  for the
year,  subject  to  limitations  of the  Plan.  The  Company  makes  a  matching
contribution  of 50% of the first 6% of compensation a participant  defers.  The
amount of the Company's  contribution  under the profit  sharing  portion of the
Plan is in such  discretionary  amount as the Board of  Directors  may  annually
determine,  subject to limitations of the Plan. Company  contributions were $8.2
million,  $7.3 million, and $6.8 million, for the years ended February 28, 2001,
February 29, 2000, and February 28, 1999, respectively.

     The Company's  subsidiary,  Matthew Clark,  has a defined  benefit  pension
plan, which covers  substantially all of its employees,  and its assets are held
by a Trustee who administers  funds separately from the Company's  finances.  As
part of the  acquisition of the Black Velvet Assets,  the Company's  subsidiary,
Barton,  acquired  defined benefit pension plans,  which cover certain  Canadian
employees.

<PAGE>
                                     - 53 -

     Net periodic benefit cost included the following components:

<TABLE>
<CAPTION>

                                                                                      For the        For the
                                                                                     Year Ended     Year Ended
                                                                                    February 29,   February 28,
                                          For the Year Ended February 28, 2001          2000           1999
                                       ------------------------------------------   ------------   ------------
                                       Matthew Clark      Barton         Total          Total          Total
                                       -------------   ------------   -----------   ------------   ------------
(in thousands)
<S>                                    <C>             <C>            <C>           <C>            <C>
Service cost                           $       4,077   $        303   $     4,380   $      4,635   $      1,335
Interest cost                                 10,269            985        11,254         11,205          2,671
Expected return on plan assets               (15,034)        (1,130)      (16,164)       (16,340)        (3,848)
Amortization of prior service cost              -               (95)          (95)          -              -
                                       -------------   ------------   -----------   ------------   ------------
Net periodic benefit (income) cost     $        (688)  $         63   $      (625)  $       (500)  $        158
                                       =============   ============   ===========   ============   ============

</TABLE>

     The following table  summarizes the funded status of the Company's  defined
benefit  pension plans and the related  amounts that are  primarily  included in
other assets in the Consolidated Balance Sheets.

<TABLE>
<CAPTION>
                                                                                                        February 29,
                                                                      February 28, 2001                     2000
                                                        --------------------------------------------    ------------
                                                        Matthew Clark       Barton          Total           Total
                                                        -------------    ------------    -----------    ------------
(in thousands)
<S>                                                     <C>              <C>             <C>            <C>
Change in benefit obligation:
Benefit obligation as of March 1                        $     184,516    $     14,281    $   198,797    $    163,680
Acquisition                                                      -               -              -             15,348
Service cost                                                    4,077             303          4,380           4,635
Interest cost                                                  10,269             985         11,254          11,205
Plan participants' contributions                                1,436            -             1,436           1,507
Actuarial (gain)/loss                                            (467)            308           (159)         10,128
Benefits paid                                                  (4,666)           (847)        (5,513)         (5,344)
Foreign currency exchange rate changes                        (15,851)           (828)       (16,679)         (2,362)
                                                        -------------    ------------    -----------    ------------
Benefit obligation as of last day of February           $     179,314    $     14,202    $   193,516    $    198,797
                                                        =============    ============    ===========    ============

Change in plan assets:
Fair value of plan assets as of March 1                 $     208,879    $     13,950    $   222,829    $    194,606
Acquisition                                                      -               -              -             12,318
Actual return on plan assets                                    6,161             765          6,926          21,851
Plan participants' contributions                                1,436            -             1,436           1,507
Employer contribution                                            -                573            573             670
Benefits paid                                                  (4,666)           (847)        (5,513)         (5,370)
Foreign currency exchange rate changes                        (17,739)           (801)       (18,540)         (2,753)
                                                        -------------    ------------    -----------    ------------
Fair value of plan assets as of last day of February    $     194,071    $     13,640    $   207,711    $    222,829
                                                        =============    ============    ===========    ============

Funded status of the plan as of last day of February:
Funded status                                           $      14,757    $       (562)   $    14,195    $     24,032
Unrecognized actuarial loss/(gain)                             10,912          (1,489)         9,423             576
                                                        -------------    ------------    -----------    ------------
Prepaid (accrued) benefit cost                          $      25,669    $     (2,051)   $    23,618    $     24,608
                                                        =============    ============    ===========    ============
</TABLE>

     The following table sets forth the principal assumptions used in developing
the benefit obligation and the net periodic pension expense:

<TABLE>
<CAPTION>
                                         February 28, 2001            February 29, 2000
                                      -----------------------      -----------------------
                                      Matthew Clark   Barton       Matthew Clark   Barton
                                      -------------  --------      -------------  --------

<S>                                       <C>          <C>             <C>          <C>
Rate of return on plan assets             7.75%        8.50%           8.00%        8.50%
Discount rate                             6.00%        7.25%           6.00%        7.25%
Rate of compensation increase             4.00%         -              4.00%         -

</TABLE>

<PAGE>
                                     - 54 -

9.   POSTRETIREMENT AND POSTEMPLOYMENT BENEFITS:

     In  connection  with  the  acquisition  of the  Black  Velvet  Assets,  the
Company's   subsidiary,   Barton,   currently   sponsors  multiple   non-pension
postretirement  and  postemployment  benefit  plans for certain of its  Canadian
employees.

     The status of the plans is as follows:

                                                    February 28,   February 29,
                                                        2001           2000
                                                    ------------   ------------
(in thousands)
Change in benefit obligation:
Benefit obligation as of March 1                    $        647   $       -
Acquisition                                                 -               698
Service cost                                                  15             14
Interest cost                                                 51             32
Benefits paid                                                (25)           (10)
Actuarial loss/(gain)                                        325           (110)
Foreign currency exchange rate changes                       (47)            23
                                                    ------------   ------------
Benefit obligation as of the last day of February   $        966   $        647
                                                    ============   ============

Funded status as of the last day of February:
Funded status                                       $       (966)  $       (647)
Unrecognized net loss/(gain)                                 211           (111)
                                                    ------------   ------------
Accrued benefit liability                           $       (755)  $       (758)
                                                    ============   ============

Assumptions as of the last day of February:
Discount rate                                              7.00%          7.25%
Increase in compensation levels                            4.00%          4.00%

Components of net periodic benefit cost for the
  twelve months ended the last day of February:
Service cost                                        $         15   $         14
Interest cost                                                 50             32
                                                    ------------   ------------
Net periodic benefit cost                           $         65   $         46
                                                    ============   ============

     At February  28, 2001, a 10% annual rate of increase in the per capita cost
of covered health  benefits was assumed for the first year. The rate was assumed
to  decrease  gradually  to 4.8% over  seven  years and to remain at this  level
thereafter.  Assumed  healthcare trend rates could have a significant  effect on
the amount  reported for health care plans.  A 1% change in assumed  health care
cost trend rate would have the following effects:

                                                            1%           1%
                                                         Increase     Decrease
                                                         --------     --------
(in thousands)
Effect on total service and interest cost components     $      6     $     (5)
Effect on postretirement benefit obligation              $     84     $    (75)

10.  STOCKHOLDERS' EQUITY:

     COMMON STOCK -
     The Company has two classes of common stock: Class A Common Stock and Class
B  Convertible  Common  Stock.  Class B  Convertible  Common  Stock  shares  are
convertible  into shares of Class A Common  Stock on a  one-to-one  basis at any
time at the option of the holder.  Holders of Class B  Convertible  Common Stock
are  entitled  to ten  votes  per  share.  Holders  of Class A Common  Stock are
entitled to one vote per share and a cash dividend premium.  If the Company pays
a cash dividend on

<PAGE>
                                     - 55 -

Class B  Convertible  Common  Stock,  each  share of Class A Common  Stock  will
receive  an amount  at least ten  percent  greater  than the  amount of the cash
dividend per share paid on Class B Convertible  Common Stock.  In addition,  the
Board of  Directors  may  declare  and pay a  dividend  on Class A Common  Stock
without paying any dividend on Class B Convertible Common Stock.

     At February 28, 2001, there were 31,238,368  shares of Class A Common Stock
and 6,151,144  shares of Class B Convertible  Common Stock  outstanding,  net of
treasury stock.

     STOCK REPURCHASE AUTHORIZATION -
     In June 1998, the Company's Board of Directors authorized the repurchase of
up to $100.0 million of its Class A Common Stock and Class B Convertible  Common
Stock.  The Company  may  finance  such  purchases,  which will become  treasury
shares,  through cash  generated  from  operations  or through the senior credit
facility.  During Fiscal 1999, the Company repurchased 2,037,672 shares of Class
A Common Stock for $44.9 million.  No  repurchases  were made during Fiscal 2000
and Fiscal 2001.

     LONG-TERM STOCK INCENTIVE PLAN -
     Under the Company's  Long-Term  Stock Incentive  Plan,  nonqualified  stock
options,  stock  appreciation  rights,  restricted  stock and other  stock-based
awards may be granted to employees,  officers and  directors of the Company.  At
the Company's Annual Meeting of Stockholders held on July 20, 1999, stockholders
approved the  amendment  to the  Company's  Long-Term  Stock  Incentive  Plan to
increase the  aggregate  number of shares of the Class A Common Stock  available
for  awards  under the plan from  8,000,000  shares to  14,000,000  shares.  The
exercise price,  vesting period and term of  nonqualified  stock options granted
are  established  by the  committee  administering  the plan (the  "Committee").
Grants of stock  appreciation  rights,  restricted  stock and other  stock-based
awards may contain such vesting, terms, conditions and other requirements as the
Committee  may  establish.   During  Fiscal  2001  and  Fiscal  2000,  no  stock
appreciation rights were granted. During Fiscal 2001, 7,550 shares of restricted
Class A Common Stock were granted at a weighted average grant date fair value of
$26.63 per share. During Fiscal 2000, no restricted stock was granted.

     INCENTIVE STOCK OPTION PLAN -
     Under the Company's  Incentive  Stock Option Plan,  incentive stock options
may be granted to employees,  including officers, of the Company. Grants, in the
aggregate,  may not  exceed  2,000,000  shares of the  Company's  Class A Common
Stock. The exercise price of any incentive stock option may not be less than the
fair market  value of the  Company's  Class A Common Stock on the date of grant.
The vesting period and term of incentive  stock options  granted are established
by the Committee. The maximum term of incentive stock options is ten years.

<PAGE>
                                     - 56 -

     A summary of stock option  activity  under the  Company's  long-term  stock
incentive plan and the incentive stock option plan is as follows:

                                            Weighted                    Weighted
                                Shares       Average                     Average
                                 Under      Exercise      Options       Exercise
                                Option        Price     Exercisable       Price
                              ----------    --------    -----------     --------
Balance, February 28, 1998     3,693,630    $  12.62        721,260     $  12.73
Options granted                1,456,400    $  25.29
Options exercised               (407,130)   $  10.04
Options forfeited/canceled      (233,390)   $  18.57
                              ----------
Balance, February 28, 1999     4,509,510    $  16.63        984,570     $  12.28
Options granted                1,639,600    $  25.21
Options exercised               (375,380)   $   8.96
Options forfeited/canceled      (297,230)   $  22.48
                              ----------
Balance, February 29, 2000     5,476,500    $  19.41      1,474,910     $  13.52
Options granted                1,930,200    $  26.03
Options exercised               (929,568)   $  14.88
Options forfeited/canceled      (322,730)   $  23.82
                              ----------
Balance, February 28, 2001     6,154,402    $  21.94      2,408,442     $  17.02
                              ==========

     The following table summarizes  information about stock options outstanding
at February 28, 2001:

                          Options Outstanding             Options Exercisable
                  ------------------------------------   ----------------------
                                  Weighted
                                  Average     Weighted                 Weighted
                                 Remaining     Average                  Average
   Range of          Number     Contractual   Exercise      Number     Exercise
Exercise Prices   Outstanding       Life        Price    Exercisable     Price
---------------   -----------   -----------   --------   -----------   --------
$ 5.75 - $12.82       764,920     4.6 years   $   8.54       662,500   $   8.52
$13.38 - $15.63       625,440     5.5 years   $  14.18       572,200   $  14.24
$17.69 - $25.00     1,498,552     7.5 years   $  22.78       758,502   $  21.55
$25.50 - $29.78     3,265,490     8.5 years   $  26.17       415,240   $  26.10
                  -----------                            -----------
                    6,154,402     7.5 years   $  21.94     2,408,442   $  17.02
                  ===========                            ===========

     The weighted  average  fair value of options  granted  during  Fiscal 2001,
Fiscal 2000, and Fiscal 1999 was $10.91, $13.14, and $13.11,  respectively.  The
fair value of options is estimated on the date of grant using the  Black-Scholes
option-pricing model with the following weighted average assumptions:  risk-free
interest rate of 6.2% for Fiscal 2001, 5.7% for Fiscal 2000, and 5.3% for Fiscal
1999;  volatility of 38.8% for Fiscal 2001, 40.0% for Fiscal 2000, and 40.6% for
Fiscal  1999;  and expected  option life of 4.7 years for Fiscal  2001,  and 7.0
years for Fiscal  2000 and Fiscal  1999.  The  dividend  yield was 0% for Fiscal
2001, Fiscal 2000, and Fiscal 1999. Forfeitures are recognized as they occur.

     EMPLOYEE STOCK PURCHASE PLAN -
     The Company has a stock purchase plan under which 2,250,000 shares of Class
A Common Stock can be issued.  Under the terms of the plan,  eligible  employees
may  purchase  shares of the  Company's  Class A Common  Stock  through  payroll
deductions.  The purchase  price is the lower of 85% of the fair market value of
the stock on the first or last day of the purchase  period.  During Fiscal 2001,
Fiscal 2000, and Fiscal 1999, employees purchased 73,888 shares,  62,124 shares,
and 99,700 shares, respectively.

     The weighted  average fair value of purchase  rights  granted during Fiscal
2001,  Fiscal 2000, and Fiscal 1999 was $7.55,  $6.09, and $6.18,  respectively.
The fair value of purchase rights is estimated on

<PAGE>
                                     - 57 -

the  date of  grant  using  the  Black-Scholes  option-pricing  model  with  the
following  weighted  average  assumptions:  risk-free  interest rate of 5.7% for
Fiscal 2001, 5.4% for Fiscal 2000, and 4.7% for Fiscal 1999; volatility of 36.8%
for Fiscal  2001,  33.6% for Fiscal 2000,  and 33.5% for Fiscal  1999;  expected
purchase right life of 0.5 years for Fiscal 2001,  Fiscal 2000, and Fiscal 1999.
The dividend yield was 0% for Fiscal 2001, Fiscal 2000, and Fiscal 1999.

     PRO FORMA DISCLOSURE -
     The Company applies Accounting Principles Board Opinion No. 25, "Accounting
for Stock Issued to Employees,"  and related  interpretations  in accounting for
its plans.  The Company adopted the  disclosure-only  provisions of Statement of
Financial   Accounting   Standards   No.  123,   "Accounting   for   Stock-Based
Compensation,"  ("SFAS  No.  123").  Accordingly,  no  incremental  compensation
expense has been  recognized for its  stock-based  compensation  plans.  Had the
Company  recognized the compensation  cost based upon the fair value at the date
of grant for awards under its plans  consistent with the methodology  prescribed
by SFAS No.  123,  net income and  earnings  per  common  share  would have been
reduced to the pro forma amounts as follows:
<TABLE>
<CAPTION>
                                                                For the Years Ended
                                        --------------------------------------------------------------------
                                             February 28,           February 29,             February 28,
                                                 2001                   2000                     1999
                                        --------------------    --------------------    --------------------
                                           As          Pro         As         Pro          As         Pro
                                        Reported      Forma     Reported     Forma      Reported     Forma
                                        --------    --------    --------    --------    --------    --------
(in thousands, except per share data)
<S>                                     <C>         <C>         <C>         <C>         <C>         <C>
Net income                              $ 97,342    $ 86,784    $ 77,375    $ 71,474    $ 50,472    $ 46,942
                                        ========    ========    ========    ========    ========    ========
Earnings per common share:
  Basic                                 $   2.65    $   2.36    $   2.14    $   1.98    $   1.38    $   1.28
  Diluted                               $   2.60    $   2.32    $   2.09    $   1.93    $   1.35    $   1.25
</TABLE>
     The pro forma effect on net income may not be  representative of that to be
expected in future years.

11.  EARNINGS PER COMMON SHARE:

     The following table presents earnings per common share as follows:
<TABLE>
<CAPTION>
                                                                            For the Years Ended
                                                              ------------------------------------------------
                                                              February 28,      February 29,      February 28,
                                                                  2001              2000              1999
                                                              ------------      ------------      ------------
(in thousands, except per share data)
<S>                                                           <C>               <C>               <C>
Income before extraordinary item                              $     97,342      $     77,375      $     61,909
Extraordinary item, net of income taxes                               -                 -              (11,437)
                                                              ------------      ------------      ------------
Income applicable to common shares                            $     97,342      $     77,375      $     50,472
                                                              ============      ============      ============

Weighted average common shares outstanding - basic                  36,723            36,108            36,587
Stock options                                                          652               890               920
                                                              ------------      ------------      ------------
Weighted average common shares outstanding - diluted                37,375            36,998            37,507
                                                              ============      ============      ============

Earnings per common share:
  Basic:
  Income before extraordinary item                            $       2.65      $       2.14      $       1.69
  Extraordinary item, net of income taxes                             -                 -                (0.31)
                                                              ------------      ------------      ------------
  Earnings per common share - basic                           $       2.65      $       2.14      $       1.38
                                                              ============      ============      ============

  Diluted:
  Income before extraordinary item                            $       2.60      $       2.09      $       1.65
  Extraordinary item, net of income taxes                             -                 -                (0.30)
                                                              ------------      ------------      ------------
  Earnings per common share - diluted                         $       2.60      $       2.09      $       1.35
                                                              ============      ============      ============
</TABLE>
<PAGE>
                                     - 58 -

12.  COMMITMENTS AND CONTINGENCIES:

     OPERATING LEASES -
     Future  payments  under  noncancelable  operating  leases having initial or
remaining  terms of one year or more are as follows  during the next five fiscal
years and thereafter:

                (in thousands)
                2002              $   18,717
                2003                  17,787
                2004                  16,939
                2005                  15,430
                2006                  13,459
                Thereafter            96,362
                                  ----------
                                  $  178,694
                                  ==========

     Rental  expense was $19.6  million,  $17.4  million,  and $8.2  million for
Fiscal 2001, Fiscal 2000, and Fiscal 1999, respectively.

     PURCHASE COMMITMENTS AND CONTINGENCIES -
     The Company has agreements  with suppliers to purchase  various  spirits of
which certain  agreements are denominated in British pound sterling and Canadian
dollars.  The  maximum  future  obligation  under these  agreements,  based upon
exchange  rates at February  28, 2001,  aggregate  $22.6  million for  contracts
expiring through December 2005.

     All of the Company's  imported beer products are marketed and sold pursuant
to exclusive  distribution  agreements from the suppliers of these products. The
Company's agreement to distribute Corona Extra and its other Mexican beer brands
exclusively  throughout  25 primarily  western U.S.  states  expires in December
2006, with automatic five year renewals  thereafter,  subject to compliance with
certain performance criteria and other terms under the agreement.  The remaining
agreements  expire  through  December  2007.  Prior to their  expiration,  these
agreements  may be terminated  if the Company fails to meet certain  performance
criteria.  At February 28, 2001, the Company  believes it is in compliance  with
all of its material  distribution  agreements and, given the Company's long-term
relationships  with its  suppliers,  the  Company  does not  believe  that these
agreements will be terminated.

     In  connection  with  previous  acquisitions,  the  Company  assumed  grape
purchase contracts with certain growers and suppliers.  In addition, the Company
has  entered  into other  grape  purchase  contracts  with  various  growers and
suppliers in the normal course of business.  Under the grape purchase contracts,
the  Company is  committed  to  purchase  all grape  production  yielded  from a
specified  number of acres for a period of time ranging up to  seventeen  years.
The actual  tonnage  and price of grapes that must be  purchased  by the Company
will vary each year depending on certain  factors,  including  weather,  time of
harvest,  overall market conditions and the agricultural  practices and location
of the growers and  suppliers  under  contract.  The  Company  purchased  $135.0
million of grapes under these  contracts  during  Fiscal 2001.  Based on current
production  yields and published  grape prices,  the Company  estimates that the
aggregate  purchases  under  these  contracts  over  the  remaining  term of the
contracts will be $647.6 million.

     The Company's aggregate obligations under bulk wine purchase contracts will
be $8.1 million over the remaining  term of the contracts  which expire  through
fiscal 2003.

     EMPLOYMENT CONTRACTS -
     The Company has employment contracts with certain of its executive officers
and certain other  management  personnel with automatic one year renewals unless
terminated by either party.  These agreements  provide for minimum salaries,  as
adjusted for annual  increases,  and may include  incentive  bonuses  based upon
attainment of specified management goals. In addition,  these agreements provide
for

<PAGE>
                                     - 59 -

severance  payments in the event of specified  termination  of  employment.  The
aggregate commitment for future compensation and severance,  excluding incentive
bonuses,  was $4.0  million as of February  28,  2001,  of which $2.0 million is
accrued in other liabilities as of February 28, 2001.

     EMPLOYEES COVERED BY COLLECTIVE BARGAINING AGREEMENTS -
     Approximately  30% of the  Company's  full-time  employees  are  covered by
collective  bargaining  agreements  at February  28, 2001.  Agreements  expiring
within one year cover approximately 12% of the Company's full-time employees.

     LEGAL MATTERS -
     The  Company  is subject to  litigation  from time to time in the  ordinary
course of business.  Although the amount of any  liability  with respect to such
litigation  cannot be  determined,  in the opinion of management  such liability
will not have a material  adverse effect on the Company's  financial  condition,
results of operations or cash flows.

13.  SIGNIFICANT CUSTOMERS AND CONCENTRATION OF CREDIT RISK:

     Gross sales to the five largest customers of the Company represented 17.6%,
17.1%,  and 25.2% of the  Company's  gross  sales  for the  fiscal  years  ended
February 28, 2001, February 29, 2000, and February 28, 1999, respectively. Gross
sales to the Company's largest customer, Southern Wine and Spirits,  represented
8.2%,  8.0%,  and 10.9% of the Company's  gross sales for the fiscal years ended
February 28,  2001,  February  29,  2000,  and February 28, 1999,  respectively.
Accounts receivable from the Company's largest customer  represented 9.8%, 8.6%,
and 8.5% of the  Company's  total  accounts  receivable as of February 28, 2001,
February 29, 2000,  and  February  28,  1999,  respectively.  Gross sales to the
Company's  five  largest  customers  are  expected to  continue  to  represent a
significant portion of the Company's revenues.  The Company's  arrangements with
certain of its  customers  may,  generally,  be  terminated by either party with
prior notice.  The Company performs ongoing credit evaluations of its customers'
financial  position,  and  management  of the Company is of the opinion that any
risk of  significant  loss is reduced  due to the  diversity  of  customers  and
geographic sales area.

14.  CONDENSED CONSOLIDATING FINANCIAL INFORMATION:

     The following  information sets forth the condensed  consolidating  balance
sheets of the Company as of February  28, 2001,  and February 29, 2000,  and the
condensed consolidating  statements of operations and cash flows for each of the
three years in the period ended February 28, 2001,  for the Company,  the parent
company, the combined  subsidiaries of the Company which guarantee the Company's
senior notes and senior  subordinated  notes  ("Subsidiary  Guarantors") and the
combined  subsidiaries  of the  Company  which  are not  Subsidiary  Guarantors,
primarily Matthew Clark ("Subsidiary Nonguarantors").  The Subsidiary Guarantors
are wholly owned and the guarantees are full,  unconditional,  joint and several
obligations of each of the Subsidiary Guarantors.  Separate financial statements
for the  Subsidiary  Guarantors  of the  Company are not  presented  because the
Company has determined that such financial  statements  would not be material to
investors.  The  Subsidiary  Guarantors  comprise all of the direct and indirect
subsidiaries of the Company,  other than Matthew Clark,  the Company's  Canadian
subsidiary,  and  certain  other  subsidiaries  which  individually,  and in the
aggregate, are inconsequential.  The accounting policies of the subsidiaries are
the  same as those  described  in Note 1 -  Summary  of  Significant  Accounting
Policies.  There are no restrictions on the ability of the Subsidiary Guarantors
to  transfer  funds  to the  Company  in the  form of cash  dividends,  loans or
advances.

<PAGE>
                                     - 60 -
<TABLE>
<CAPTION>
                                               Parent        Subsidiary     Subsidiary
                                               Company       Guarantors    Nonguarantors    Eliminations    Consolidated
                                             -----------    ------------   -------------    ------------    ------------
(in thousands)
<S>                                          <C>            <C>            <C>              <C>             <C>
Condensed Consolidating Balance Sheet
-------------------------------------
at February 28, 2001
--------------------
Current assets:
  Cash and cash investments                  $   142,104    $      3,239   $         329    $       -       $    145,672
  Accounts receivable, net                        80,299         116,784         117,179            -            314,262
  Inventories, net                                31,845         515,274         122,965             (66)        670,018
  Prepaid expenses and other
    current assets                                 6,551          33,565          20,921            -             61,037
  Intercompany receivable (payable)              (61,783)         54,169           7,614            -               -
                                             -----------    ------------   -------------    ------------    ------------
      Total current assets                       199,016         723,031         269,008             (66)      1,190,989
Property, plant and equipment, net                30,554         320,143         197,917            -            548,614
Investments in subsidiaries                    1,835,088         525,442            -         (2,360,530)           -
Other assets                                      87,764         434,782         250,020            -            772,566
                                             -----------    ------------   -------------    ------------    ------------
  Total assets                               $ 2,152,422    $  2,003,398   $     716,945    $ (2,360,596)   $  2,512,169
                                             ===========    ============   =============    ============    ============

Current liabilities:
  Notes payable                              $      -       $       -      $       4,184    $       -       $      4,184
  Current maturities of long-term debt            49,218              70           4,888            -             54,176
  Accounts payable and other liabilities         111,388          58,448         143,010            -            312,846
  Accrued excise taxes                             9,411          35,474          11,069            -             55,954
                                             -----------    ------------   -------------    ------------    ------------
      Total current liabilities                  170,017          93,992         163,151            -            427,160
Long-term debt, less current maturities        1,305,302             758           1,377            -          1,307,437
Deferred income taxes                             33,232          71,619          27,123            -            131,974
Other liabilites                                     437           2,953          25,940            -             29,330
Stockholders' equity:
  Class A and class B common stock                   448           6,434          64,867         (71,301)            448
  Additional paid-in capital                     267,655         742,343         436,466      (1,178,809)        267,655
  Retained earnings                              455,864       1,086,311          24,109      (1,110,486)        455,798
  Accumulated other comprehensive
    income (loss)                                  1,096          (1,012)        (26,088)           -            (26,004)
  Treasury stock and other                       (81,629)           -               -               -            (81,629)
                                             -----------    ------------   -------------    ------------    ------------
      Total stockholders' equity                 643,434       1,834,076         499,354      (2,360,596)        616,268
                                             -----------    ------------   -------------    ------------    ------------
  Total liabilities and
    stockholders' equity                     $ 2,152,422    $  2,003,398   $     716,945    $ (2,360,596)   $  2,512,169
                                             ===========    ============   =============    ============    ============

Condensed Consolidating Balance Sheet
-------------------------------------
at February 29, 2000
--------------------
Current assets:
  Cash and cash investments                  $      -       $        231   $      34,077    $       -       $     34,308
  Accounts receivable, net                        81,076          95,350         114,682            -            291,108
  Inventories, net                                29,870         467,152         118,766             (88)        615,700
  Prepaid expenses and other
    current assets                                 6,175          38,269          10,437            -             54,881
  Intercompany receivable (payable)               30,174          (3,273)        (26,901)           -               -
                                             -----------    ------------   -------------    ------------    ------------
      Total current assets                       147,295         597,729         251,061             (88)        995,997
Property, plant and equipment, net                30,397         298,513         214,061            -            542,971
Investments in subsidiaries                    1,714,150         529,267            -         (2,243,417)           -
Other assets                                      86,652         447,945         275,226            -            809,823
                                             -----------    ------------   -------------    ------------    ------------
  Total assets                               $ 1,978,494    $  1,873,454   $     740,348    $ (2,243,505)   $  2,348,791
                                             ===========    ============   =============    ============    ============
<PAGE>
                                     - 61 -
<CAPTION>
                                               Parent        Subsidiary     Subsidiary
                                               Company       Guarantors    Nonguarantors    Eliminations    Consolidated
                                             -----------    ------------   -------------    ------------    ------------
(in thousands)
<S>                                          <C>            <C>            <C>              <C>             <C>
Current liabilities:
  Notes payable                              $    26,800    $       -      $       1,334    $       -       $     28,134
  Current maturities of long-term debt            51,801            -                852            -             52,653
  Accounts payable and other liabilities         110,018          74,154         142,812            -            326,984
  Accrued excise taxes                             4,712          14,737          10,997            -             30,446
                                             -----------    ------------   -------------    ------------    ------------
      Total current liabilities                  193,331          88,891         155,995            -            438,217
Long-term debt, less current maturities        1,229,629             446           7,060            -          1,237,135
Deferred income taxes                             28,697          65,350          22,400            -            116,447
Other liabilites                                     511           2,917          32,724            -             36,152
Stockholders' equity:
  Class A and class B common stock                   439           6,434          64,867         (71,301)            439
  Additional paid-in capital                     247,730         742,343         436,466      (1,178,809)        247,730
  Retained earnings                              358,544         965,373          27,934        (993,395)        358,456
  Accumulated other comprehensive
    income (loss)                                  1,249           1,700          (7,098)           -             (4,149)
  Treasury stock and other                       (81,636)           -               -               -            (81,636)
                                             -----------    ------------   -------------    ------------    ------------
      Total stockholders' equity                 526,326       1,715,850         522,169      (2,243,505)        520,840
                                             -----------    ------------   -------------    ------------    ------------
  Total liabilities and
    stockholders' equity                     $ 1,978,494    $  1,873,454   $     740,348    $ (2,243,505)   $  2,348,791
                                             ===========    ============   =============    ============    ============

Condensed Consolidating Statement of Income
-------------------------------------------
for the Year Ended February 28, 2001
------------------------------------
Gross sales                                  $   741,668    $  1,759,368   $     979,509    $   (326,251)   $  3,154,294
  Less - excise taxes                           (131,997)       (396,773)       (228,839)           -           (757,609)
                                             -----------    ------------   -------------    ------------    ------------
    Net sales                                    609,671       1,362,595         750,670        (326,251)      2,396,685
Cost of product sold                            (474,913)       (955,893)       (534,697)        326,273      (1,639,230)
                                             -----------    ------------   -------------    ------------    ------------
    Gross profit                                 134,758         406,702         215,973              22         757,455
Selling, general and administrative
  expenses                                      (140,757)       (150,241)       (195,589)           -           (486,587)
                                             -----------    ------------   -------------    ------------    ------------
    Operating income                              (5,999)        256,461          20,384              22         270,868
Interest expense, net                            (27,840)        (76,076)         (4,715)           -           (108,631)
Equity earnings in subsidiary                    120,937          (3,825)           -           (117,112)           -
                                             -----------    ------------   -------------    ------------    ------------
    Income before income taxes                    87,098         176,560          15,669        (117,090)        162,237
Provision for income taxes                        10,222         (55,623)        (19,494)           -            (64,895)
                                             -----------    ------------   -------------    ------------    ------------
Net income                                   $    97,320    $    120,937   $      (3,825)   $   (117,090)   $     97,342
                                             ===========    ============   =============    ============    ============

Condensed Consolidating Statement of Income
-------------------------------------------
for the Year Ended February 29, 2000
------------------------------------
Gross sales                                  $   742,375    $  1,692,070   $   1,010,526    $   (356,272)   $  3,088,699
  Less - excise taxes                           (135,196)       (372,450)       (240,584)           -           (748,230)
                                             -----------    ------------   -------------    ------------    ------------
    Net sales                                    607,179       1,319,620         769,942        (356,272)      2,340,469
Cost of product sold                            (444,993)       (983,026)       (546,174)        356,184      (1,618,009)
                                             -----------    ------------   -------------    ------------    ------------
    Gross profit                                 162,186         336,594         223,768             (88)        722,460
Selling, general and administrative
  expenses                                      (150,732)       (160,749)       (170,428)           -           (481,909)
Nonrecurring charges                                -             (2,565)         (2,945)           -             (5,510)
                                             -----------    ------------   -------------    ------------    ------------
    Operating income                              11,454         173,280          50,395             (88)        235,041
Interest expense, net                            (18,701)        (82,265)         (5,116)           -           (106,082)
Equity earnings in subsidiary                     81,776          22,974            -           (104,750)           -
                                             -----------    ------------   -------------    ------------    ------------
    Income before income taxes                    74,529         113,989          45,279        (104,838)        128,959
Provision for income taxes                         2,934         (32,213)        (22,305)           -            (51,584)
                                             -----------    ------------   -------------    ------------    ------------
Net income                                   $    77,463    $     81,776   $      22,974    $   (104,838)   $     77,375
                                             ===========    ============   =============    ============    ============

<PAGE>
                                     - 62 -
<CAPTION>
                                               Parent        Subsidiary     Subsidiary
                                               Company       Guarantors    Nonguarantors    Eliminations    Consolidated
                                             -----------    ------------   -------------    ------------    ------------
(in thousands)
<S>                                          <C>            <C>            <C>              <C>             <C>
Condensed Consolidating Statement of Income
-------------------------------------------
for the Year Ended February 28, 1999
------------------------------------
Gross sales                                  $   695,533    $  1,439,543   $     206,879    $   (357,154)   $  1,984,801
  Less - excise taxes                           (126,770)       (312,569)        (48,119)           -           (487,458)
                                             -----------    ------------   -------------    ------------    ------------
    Net sales                                    568,763       1,126,974         158,760        (357,154)      1,497,343
Cost of product sold                            (410,968)       (878,757)       (116,738)        357,154      (1,049,309)
                                             -----------    ------------   -------------    ------------    ------------
    Gross profit                                 157,795         248,217          42,022            -            448,034
Selling, general and administrative
  expenses                                      (155,730)       (113,387)        (30,409)           -           (299,526)
Nonrecurring charges                                -               -             (2,616)           -             (2,616)
                                             -----------    ------------   -------------    ------------    ------------
    Operating income                               2,065         134,830           8,997            -            145,892
Interest expense, net                                834         (40,487)         (1,809)           -            (41,462)
Equity earnings in subsidiary                     60,896           4,960            -            (65,856)           -
                                             -----------    ------------   -------------    ------------    ------------
    Income before income taxes and
      extraordinary item                          63,795          99,303           7,188         (65,856)        104,430
Provision for income taxes                        (1,886)        (38,407)         (2,228)           -            (42,521)
                                             -----------    ------------   -------------    ------------    ------------
    Income before extraordinary item              61,909          60,896           4,960         (65,856)         61,909
Extraordinary item, net of income taxes          (11,437)           -               -               -            (11,437)
                                             -----------    ------------   -------------    ------------    ------------
Net income                                   $    50,472    $     60,896   $       4,960    $    (65,856)   $     50,472
                                             ===========    ============   =============    ============    ============


Condensed Consolidated Statement of Cash
----------------------------------------
Flows for the Year Ended February 28,2001
-----------------------------------------
Net cash provided by (used in)
  operating activities                       $    92,765    $     20,479   $      (9,469)   $       -       $    103,775

Cash flows from investing activities:
  Purchases of property, plant and
    equipment                                     (5,609)        (42,771)        (19,837)           -            (68,217)
  Purchases of businesses, net of
    cash acquired                                   -               -             (4,459)           -             (4,459)
  Other                                              120             930             959            -              2,009
                                             -----------    ------------   -------------    ------------    ------------
Net cash used in investing activities             (5,489)        (41,841)        (23,337)           -            (70,667)
                                             -----------    ------------   -------------    ------------    ------------

Cash flows from financing activities:
  Proceeds from issuance of long-term
    debt                                         319,400            -               -               -            319,400
  Exercise of employee stock options              13,806            -               -               -             13,806
  Proceeds from employee stock
    purchases                                      1,547            -               -               -              1,547
  Principal payments of long-term debt          (220,888)            639          (1,659)           -           (221,908)
  Net repayments of notes payable                (26,800)           (704)          3,889            -            (23,615)
  Payment of issuance costs of
    long-term debt                                (5,794)           -               -               -             (5,794)
                                             -----------    ------------   -------------    ------------    ------------
Net cash provided by (used in)
  financing activities                            81,271            (65)           2,230            -             83,436
                                             -----------    ------------   -------------    ------------    ------------

Effect of exchange rate changes on
  cash and cash investments                      (26,443)         24,435          (3,172)           -             (5,180)
                                             -----------    ------------   -------------    ------------    ------------

Net increase (decrease) in cash
  and cash investments                           142,104           3,008         (33,748)           -            111,364
Cash and cash investments, beginning
  of year                                           -                231          34,077            -             34,308
                                             -----------    ------------   -------------    ------------    ------------
Cash and cash investments, end of year       $   142,104    $      3,239   $         329    $       -       $    145,672
                                             ===========    ============   =============    ============    ============
<PAGE>
                                     - 63 -
<CAPTION>
                                               Parent        Subsidiary     Subsidiary
                                               Company       Guarantors    Nonguarantors    Eliminations    Consolidated
                                             -----------    ------------   -------------    ------------    ------------
(in thousands)
<S>                                          <C>            <C>            <C>              <C>             <C>
Condensed Consolidated Statement of Cash
----------------------------------------
Flows for the Year Ended February 29, 2000
------------------------------------------
Net cash (used in) provided by
  operating activities                       $  (137,490)   $    245,989   $      39,556    $       -       $    148,055

Cash flows from investing activities:
  Purchases of property, plant and
    equipment                                     (5,163)        (42,220)        (10,364)           -            (57,747)
  Purchases of businesses, net of
    cash acquired                                   -           (453,117)            207            -           (452,910)
  Intercompany equity contributions             (269,899)        269,899            -               -               -
  Other                                           13,000          (2,198)          4,175            -             14,977
                                             -----------    ------------   -------------    ------------    ------------
Net cash used in investing activities           (262,062)       (227,636)         (5,982)           -           (495,680)
                                             -----------    ------------   -------------    ------------    ------------

Cash flows from financing activities:
  Proceeds from issuance of long-term
    debt                                       1,486,240            -               -               -          1,486,240
  Exercise of employee stock options               3,358            -               -               -              3,358
  Proceeds from employee stock
    purchases                                      1,428            -               -               -              1,428
  Principal payments of long-term debt        (1,017,850)        (25,550)        (16,552)           -         (1,059,952)
  Net repayments of notes payable                (56,675)            400          (4,354)           -            (60,629)
  Payment of issuance costs of
    long-term debt                               (14,888)           -               -               -            (14,888)
                                             -----------    ------------   -------------    ------------    ------------
Net cash provided by (used in)
  financing activities                           401,613         (25,150)        (20,906)           -            355,557
                                             -----------    ------------   -------------    ------------    ------------

Effect of exchange rate changes on
  cash and cash investments                       (5,820)          5,850          (1,299)           -             (1,269)
                                             -----------    ------------   -------------    ------------    ------------

Net (decrease) increase in cash
  and cash investments                            (3,759)           (947)         11,369            -              6,663
Cash and cash investments, beginning
  of year                                          3,759           1,178          22,708            -             27,645
                                             -----------    ------------   -------------    ------------    ------------
Cash and cash investments, end of year       $      -       $        231   $      34,077    $       -       $     34,308
                                             ===========    ============   =============    ============    ============

<PAGE>
                                     - 64 -
<CAPTION>
                                               Parent        Subsidiary     Subsidiary
                                               Company       Guarantors    Nonguarantors    Eliminations    Consolidated
                                             -----------    ------------   -------------    ------------    ------------
(in thousands)
<S>                                          <C>            <C>            <C>              <C>             <C>
Condensed Consolidated Statement of Cash
----------------------------------------
Flows for the Year Ended February 28, 1999
------------------------------------------
Net cash (used in) provided by
  operating activities                       $  (254,656)   $    315,343   $      46,558    $       -       $    107,245

Cash flows from investing activities:
  Purchases of property, plant and
    equipment                                    (15,615)        (23,798)        (10,444)           -            (49,857)
  Purchases of businesses, net of
    cash acquired                                   -           (358,121)         25,905            -           (332,216)
  Intercompany equity contributions             (158,016)         67,655          90,361            -               -
  Other                                             -               (475)            190            -               (285)
                                             -----------    ------------   -------------    ------------    ------------
Net cash (used in) provided by
  investing activities                          (173,631)       (314,739)        106,012            -           (382,358)
                                             -----------    ------------   -------------    ------------    ------------

Cash flows from financing activities:
  Proceeds from issuance of long-term
    debt                                         625,630           9,460            -               -            635,090
  Exercise of employee stock options               4,083            -               -               -              4,083
  Proceeds from employee stock
    purchases                                      1,840            -               -               -              1,840
  Principal payments of long-term debt          (140,118)           -           (123,983)           -           (264,101)
  Net repayments of notes payable                 (8,824)           -             (5,083)           -            (13,907)
  Payment of issuance costs of
    long-term debt                                (7,201)         (9,908)           -               -            (17,109)
  Purchases of treasury stock                    (44,878)           -               -               -            (44,878)
                                             -----------    ------------   -------------    ------------    ------------
Net cash provided by (used in)
  financing activities                           430,532            (448)       (129,066)           -            301,018
                                             -----------    ------------   -------------    ------------    ------------

Effect of exchange rate changes on
  cash and cash investments                        1,128             176            (796)           -                508
                                             -----------    ------------   -------------    ------------    ------------

Net increase in cash and cash
  investments                                      3,373             332          22,708            -             26,413
Cash and cash investments, beginning
  of year                                            386             846            -               -              1,232
                                             -----------    ------------   -------------    ------------    ------------
Cash and cash investments, end of year       $     3,759    $      1,178   $      22,708    $       -       $     27,645
                                             ===========    ============   =============    ============    ============
</TABLE>


15.  BUSINESS SEGMENT INFORMATION:

     The Company  reports its operating  results in five  segments:  Canandaigua
Wine (branded popular premium wine and brandy, and other,  primarily grape juice
concentrate);  Barton (primarily beer and spirits); Matthew Clark (branded wine,
cider and bottled  water,  and wholesale  wine,  cider,  spirits,  beer and soft
drinks); Franciscan (primarily branded super-premium and ultra-premium wine) and
Corporate  Operations and Other  (primarily  corporate  related items).  Segment
selection was based upon  internal  organizational  structure,  the way in which
these operations are managed and their  performance  evaluated by management and
the  Company's  Board of  Directors,  the  availability  of  separate  financial
results, and materiality considerations. The accounting policies of the segments
are the same as those  described in Note 1 - Summary of  Significant  Accounting
Policies.  The Company  evaluates  performance based on operating profits of the
respective business units.

<PAGE>
                                     - 65 -

     Segment information is as follows:

                                               For the Years Ended
                                   --------------------------------------------
                                   February 28,    February 29,    February 28,
                                       2001            2000            1999
                                   ------------    ------------    ------------
(in thousands)
Canandaigua Wine:
-----------------
Net sales:
   Branded:
     External customers            $    603,948    $    623,796    $    598,782
     Intersegment                         6,451           5,524            -
                                   ------------    ------------    ------------
     Total Branded                      610,399         629,320         598,782
                                   ------------    ------------    ------------
   Other:
     External customers                  61,480          81,442          70,711
     Intersegment                        16,562           1,146            -
                                   ------------    ------------    ------------
     Total Other                         78,042          82,588          70,711
                                   ------------    ------------    ------------
Net sales                          $    688,441    $    711,908    $    669,493
Operating income                   $     50,789    $     46,778    $     46,283
Long-lived assets                  $    189,393    $    192,828    $    191,762
Total assets                       $    644,697    $    639,687    $    650,578
Capital expenditures               $     17,940    $     20,213    $     25,275
Depreciation and amortization      $     22,952    $     20,828    $     20,838

Barton:
-------
Net sales:
   Beer                            $    659,371    $    570,380    $    478,611
   Spirits                              285,743         267,762         185,938
                                   ------------    ------------    ------------
Net sales                          $    945,114    $    838,142    $    664,549
Operating income                   $    167,680    $    142,931    $    102,624
Long-lived assets                  $     76,777    $     78,876    $     50,221
Total assets                       $    724,511    $    684,228    $    478,580
Capital expenditures               $      6,589    $      7,218    $      3,269
Depreciation and amortization      $     16,069    $     14,452    $     10,765

Matthew Clark:
--------------
Net sales:
   Branded:
     External customers            $    285,717    $    313,027    $     64,879
     Intersegment                         1,193              75            -
                                   ------------    ------------    ------------
     Total Branded                      286,910         313,102          64,879
   Wholesale                            404,209         416,644          93,881
                                   ------------    ------------    ------------
Net sales                          $    691,119    $    729,746    $    158,760
Operating income                   $     48,961    $     48,473    $      8,998
Long-lived assets                  $    145,794    $    158,119    $    169,693
Total assets                       $    583,203    $    636,807    $    631,313
Capital expenditures               $     15,562    $     17,949    $     10,444
Depreciation and amortization      $     17,322    $     20,238    $      4,836

Franciscan:
-----------
Net sales:
   External customers              $     92,898    $     62,046    $       -
   Intersegment                             217              73            -
                                   ------------    ------------    ------------
Net sales                          $     93,115    $     62,119    $       -
Operating income                   $     24,495    $     12,708    $       -
Long-lived assets                  $    130,375    $    106,956    $       -
Total assets                       $    394,740    $    357,999    $       -
Capital expenditures               $     27,780    $     10,741    $       -
Depreciation and amortization      $     10,296    $      6,028    $       -

<PAGE>
                                     - 66 -

                                               For the Years Ended
                                   --------------------------------------------
                                   February 28,    February 29,    February 28,
                                       2001            2000            1999
                                   ------------    ------------    ------------
(in thousands)
Corporate Operations and Other:
-------------------------------
Net sales                          $      3,319    $      5,372    $      4,541
Operating loss                     $    (21,057)   $    (15,849)   $    (12,013)
Long-lived assets                  $      6,275    $      6,192    $     17,127
Total assets                       $    165,018    $     30,070    $     33,305
Capital expenditures               $        346    $      1,626    $     10,869
Depreciation and amortization      $      3,744    $      3,177    $      2,151

Intersegment eliminations:
--------------------------
Net sales                          $    (24,423)   $     (6,818)   $       -

Consolidated:
-------------
Net sales                          $  2,396,685    $  2,340,469    $  1,497,343
Operating income                   $    270,868    $    235,041    $    145,892
Long-lived assets                  $    548,614    $    542,971    $    428,803
Total assets                       $  2,512,169    $  2,348,791    $  1,793,776
Capital expenditures               $     68,217    $     57,747    $     49,857
Depreciation and amortization      $     70,383    $     64,723    $     38,590


     The Company's  areas of operations  are  principally  in the United States.
Operations  outside the United  States  consist of Matthew  Clark's  operations,
which are primarily in the United  Kingdom.  No other single foreign  country or
geographic area is significant to the consolidated operations.

16.  NONRECURRING CHARGES:

     During  Fiscal  2000,  the Company  incurred  nonrecurring  charges of $5.5
million related to the closure of a cider production facility within the Matthew
Clark operating segment in the United Kingdom ($2.9 million) and to a management
reorganization  within the  Canandaigua  Wine operating  segment ($2.6 million).
During Fiscal 1999, the Company  incurred  nonrecurring  charges of $2.6 million
also related to the closure of the aforementioned Matthew Clark cider production
facility.

17.  ACCOUNTING PRONOUNCEMENTS:

     In June 1998, the Financial  Accounting Standards Board issued Statement of
Financial  Accounting  Standards  No.  133  ("SFAS No.  133"),  "Accounting  for
Derivative  Instruments  and  Hedging  Activities."  SFAS  No.  133  establishes
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts  (collectively referred to as
derivatives),  and for  hedging  activities.  SFAS No. 133  requires  that every
derivative  be recorded as either an asset or liability in the balance sheet and
measured  at its fair  value.  SFAS No. 133 also  requires  that  changes in the
derivative's  fair value be  recognized  currently in earnings  unless  specific
hedge  accounting  criteria are met.  Special  accounting for qualifying  hedges
allows a derivative's  gains and losses to offset related  results on the hedged
item in the income  statement,  and requires that a company  formally  document,
designate  and assess the  effectiveness  of  transactions  that  receive  hedge
accounting.

     In June 1999, the Financial  Accounting Standards Board issued Statement of
Financial  Accounting  Standards  No.  137  ("SFAS No.  137"),  "Accounting  for
Derivative Instruments and Hedging Activities--Deferral of the Effective Date of
FASB  Statement No. 133." SFAS No. 137 delays the effective date of SFAS No. 133
for one year.  With the  issuance  of SFAS No.  137,  the Company is required to
adopt SFAS No. 133 on a prospective  basis for interim  periods and fiscal years
beginning March 1, 2001.

<PAGE>
                                     - 67 -

     In June 2000, the Financial  Accounting Standards Board issued Statement of
Financial Accounting Standards No. 138 ("SFAS No. 138"), "Accounting for Certain
Derivative  Instruments  and Certain  Hedging  Activities--an  amendment of FASB
Statement No. 133." SFAS No. 138 amends the accounting  and reporting  standards
of  SFAS  No.  133  for  certain  derivative  instruments  and  certain  hedging
activities. The Company is required to adopt SFAS No. 138 concurrently with SFAS
No. 133. The Company  believes the effect of the adoption of these statements on
its financial  statements  will not be material  based on the Company's  current
risk management strategies.

     In May 2000, the Emerging  Issues Task Force ("EITF") issued EITF Issue No.
00-14 ("EITF No. 00-14"),  "Accounting for Certain Sales  Incentives," which was
subsequently  amended in April 2001. EITF No. 00-14  addresses the  recognition,
measurement and income  statement  classification  of certain sales  incentives.
EITF No. 00-14 requires that sales incentives, including coupons, rebate offers,
and free product offers,  given concurrently with a single exchange  transaction
be recognized when incurred and reported as a reduction of revenue.  The Company
currently reports these costs in selling,  general and administrative  expenses.
The  Company  is  required  to  adopt  EITF  00-14 in its  financial  statements
beginning March 1, 2002. Upon adoption of EITF 00-14,  financial  statements for
prior  periods  presented for  comparative  purposes are to be  reclassified  to
comply with the  requirements of EITF 00-14.  The Company believes the impact of
EITF   00-14  on  its   financial   statements   will   result  in  a   material
reclassification  that will decrease  previously reported net sales and decrease
previously reported selling,  general and administrative expenses, but will have
no effect on operating income or net income.  The Company has not yet determined
the amount of the reclassification.

18.  SUBSEQUENT EVENTS:

     ACQUISITIONS -
     On March 5, 2001, in an asset  acquisition,  the Company  acquired  several
well-known premium wine brands,  including Vendange,  Nathanson Creek, Heritage,
and Talus, working capital (primarily inventories),  two wineries in California,
and other related  assets from  Sebastiani  Vineyards,  Inc. and Tuolomne  River
Vintners  Group (the "Turner Road Vintners  Assets").  The purchase price of the
Turner Road Vintners Assets,  including  assumption of indebtedness,  was $289.7
million.  The  acquisition  was  financed by the  proceeds  from the sale of the
February 2001 Senior Notes and revolving loan borrowings under the senior credit
facility.

     On March 26, 2001, in an asset  acquisition,  the Company  acquired certain
wine  brands,  wineries,  working  capital  (primarily  inventories),  and other
related  assets  from  Corus  Brands,   Inc.  (the  "Corus  Assets").   In  this
acquisition,  the  Company  acquired  several  well-known  premium  wine  brands
primarily sold in the northwestern United States, including Covey Run, Columbia,
Ste. Chapelle and Alice White. The purchase price of the Corus assets, including
assumption  of  indebtedness,  was $52.0 million plus an earn-out over six years
based on the performance of the brands. In connection with the transaction,  the
Company also entered into long-term  grape supply  agreements with affiliates of
Corus  Brands,  Inc.  covering  more than 1,000  acres of  Washington  and Idaho
vineyards. The acquisition was financed with revolving loan borrowings under the
senior credit facility.

     On April 10, 2001, the Company and Ravenswood Winery,  Inc.  ("Ravenswood")
announced that they entered into a merger agreement under which the Company will
acquire Ravenswood, a leading premium wine producer based in Sonoma, California.
Under the terms of the merger agreement, the Company will pay $29.50 in cash for
each outstanding share of Ravenswood,  or approximately $148 million, and assume
net debt,  which the Company  does not expect to be  significant  at the time of
closing.  The  transaction  is  subject to  satisfaction  of  customary  closing
conditions and is expected to close in late June or early July 2001. The Company
cannot guarantee, however, that this transaction will be completed

<PAGE>
                                     - 68 -

upon the agreed  upon  terms,  or at all.  The  acquisition  is  expected  to be
financed with borrowings under the senior credit facility.

     EQUITY OFFERING -
     During March,  2001, the Company  completed a public  offering of 4,370,000
shares of its Class A Common  Stock  resulting  in net  proceeds to the Company,
after deducting  underwriting discounts and expenses, of $139.4 million. The net
proceeds were used to repay  revolving loan  borrowings  under the senior credit
facility of which a portion was incurred to partially finance the acquisition of
the Turner Road Vintners Assets.

19.  SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED):

     A summary of selected quarterly financial information is as follows:

<TABLE>
<CAPTION>
                                                               QUARTER ENDED
                                         ---------------------------------------------------------
                                            May 31,     August 31,    November 30,    February 28,
             Fiscal 2001                     2000          2000           2000            2001       Full Year
------------------------------------     -----------   -----------    ------------    ------------  -----------
(in thousands, except per share data)
<S>                                      <C>           <C>            <C>             <C>           <C>
Net sales                                $   585,580   $   637,490    $    629,577    $    544,038  $ 2,396,685
Gross profit                             $   183,873   $   200,639    $    208,053    $    164,890  $   757,455
Net income                               $    17,902   $    26,110    $     34,953    $     18,377  $    97,342
Earnings per common share: (1)
  Basic                                  $      0.49   $      0.71    $       0.95    $       0.50  $      2.65
  Diluted                                $      0.48   $      0.70    $       0.93    $       0.48  $      2.60

<CAPTION>
                                                               QUARTER ENDED
                                         ---------------------------------------------------------
                                            May 31,     August 31,    November 30,    February 29,
             Fiscal 2000                     1999          1999           1999            2000       Full Year
------------------------------------     -----------   -----------    ------------    ------------  -----------
(in thousands, except per share data)
<S>                                      <C>           <C>            <C>             <C>           <C>
Net sales                                $   530,169   $   621,580    $    652,969    $    535,751  $ 2,340,469
Gross profit                             $   156,123   $   189,128    $    209,687    $    167,522  $   722,460
Net income                               $    10,846   $    21,101    $     29,900    $     15,528  $    77,375
Earnings per common share: (1)
  Basic                                  $      0.30   $      0.59    $       0.83    $       0.43  $      2.14
  Diluted                                $      0.29   $      0.57    $       0.80    $       0.42  $      2.09
<FN>
(1)  The sum of the  quarterly  earnings  per  common  share in Fiscal  2001 and
     Fiscal 2000 may not equal the total  computed for the  respective  years as
     the earnings per common  share are computed  independently  for each of the
     quarters presented and for the full year.
</FN>
</TABLE>

<PAGE>
                                     - 69 -

ITEM 9.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
-------  -----------------------------------------------------------------------
         FINANCIAL DISCLOSURE
         --------------------

     Not Applicable.


                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
--------  --------------------------------------------------

     The information required by this Item (except for the information regarding
executive  officers  required by Item 401 of Regulation S-K which is included in
Part I hereof in  accordance  with  General  Instruction  G(3)) is  incorporated
herein by reference to the Company's  proxy statement to be issued in connection
with the Annual  Meeting of  Stockholders  of the Company to be held on July 17,
2001, under those sections of the proxy statement titled "Election of Directors"
and "Section  16(a)  Beneficial  Ownership  Reporting  Compliance",  which proxy
statement  will be filed within 120 days after the end of the  Company's  fiscal
year.


ITEM 11.  EXECUTIVE COMPENSATION
--------  ----------------------

     The information  required by this Item is incorporated  herein by reference
to the  Company's  proxy  statement to be issued in  connection  with the Annual
Meeting of Stockholders  of the Company to be held on July 17, 2001,  under that
section of the proxy statement titled "Executive  Compensation" and that caption
titled  "Director  Compensation"  under  "Election  of  Directors",  which proxy
statement  will be filed within 120 days after the end of the  Company's  fiscal
year.


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
--------  --------------------------------------------------------------

     The information  required by this Item is incorporated  herein by reference
to the  Company's  proxy  statement to be issued in  connection  with the Annual
Meeting of Stockholders of the Company to be held on July 17, 2001,  under those
sections  of the  proxy  statement  titled  "Beneficial  Ownership"  and  "Stock
Ownership of  Management",  which proxy  statement will be filed within 120 days
after the end of the Company's fiscal year.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
--------  ----------------------------------------------

     The information  required by this Item is incorporated  herein by reference
to the  Company's  proxy  statement to be issued in  connection  with the Annual
Meeting of Stockholders  of the Company to be held on July 17, 2001,  under that
section of the proxy  statement  titled  "Executive  Compensation",  which proxy
statement  will be filed within 120 days after the end of the  Company's  fiscal
year.

<PAGE>
                                     - 70 -

                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
--------  ----------------------------------------------------------------

(a)  1.   Financial Statements

          The  following  consolidated  financial  statements of the Company are
          submitted herewith:

               Report of Independent Public Accountants

               Consolidated Balance Sheets - February 28, 2001, and February 29,
               2000

               Consolidated  Statements  of Income for the years ended  February
               28, 2001, February 29, 2000, and February 28, 1999

               Consolidated  Statements of Changes in  Stockholders'  Equity for
               the years  ended  February  28,  2001,  February  29,  2000,  and
               February 28, 1999

               Consolidated  Statements  of  Cash  Flows  for  the  years  ended
               February 28, 2001, February 29, 2000, and February 28, 1999

               Notes to Consolidated Financial Statements

     2.   Financial Statement Schedules

          The  following   consolidated   financial   information  is  submitted
          herewith:

               Selected Quarterly Financial Information (unaudited)

All other  schedules  are not submitted  because they are not  applicable or not
required under Regulation S-X or because the required information is included in
the financial statements or notes thereto.

Individual  financial statements of the Registrant have been omitted because the
Registrant is primarily an operating  company and no subsidiary  included in the
consolidated   financial   statements  has  minority  equity   interests  and/or
noncurrent  indebtedness,  not guaranteed by the Registrant,  in excess of 5% of
total consolidated assets.

     3.   Exhibits required to be filed by Item 601 of Regulation S-K

          For the exhibits  that are filed  herewith or  incorporated  herein by
          reference,  see  the  Index  to  Exhibits  located  on Page 95 of this
          Report.

(b)  Reports on Form 8-K

          The  following  Reports on Form 8-K were filed by the Company with the
          Securities  and Exchange  Commission  during the fourth quarter of the
          fiscal year ended February 28, 2001:

         (i)   Form  8-K  dated   January  4,  2001.   This  Form  8-K  reported
               information  under Item 5 (Other  Events)  and  included  (i) the
               Company's  Condensed  Consolidated  Balance Sheets as of November
               30, 2000  (unaudited) and February 29, 2000  (audited);  (ii) the
               Company's  Condensed  Consolidated  Statements  of Income for the
               three months ended November 30, 2000 (unaudited) and November 30,
               1999 (unaudited);  and (iii) the

<PAGE>
                                     - 71 -

               Company's  Condensed  Consolidated  Statements  of Income for the
               nine months ended November 30, 2000  (unaudited) and November 30,
               1999 (unaudited).

         (ii)  Form  8-K  dated  February  1,  2001.   This  Form  8-K  reported
               information under Item 5 (Other Events).

         (iii) Form  8-K  dated  February  12,  2001.  This  Form  8-K  reported
               information under Item 5 (Other Events).

         (iv)  Form  8-K  dated  February  14,  2001.  This  Form  8-K  reported
               information under Item 5 (Other Events).

         (v)   Form  8-K  dated  February  21,  2001.  This  Form  8-K  reported
               information under Item 5 (Other Events).

<PAGE>
                                     - 72 -

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 29, 2001                   CONSTELLATION BRANDS, INC.


                                       By: /s/ Richard Sands
                                           ---------------------------------
                                           Richard Sands, Chairman of the
                                           Board, President and Chief
                                           Executive Officer

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.



/s/ Richard Sands                          /s/ Thomas S. Summer
---------------------------------          ----------------------------------
Richard Sands, Chairman of the             Thomas S. Summer, Executive Vice
Board, President, and Chief                President and Chief Financial
Executive Officer (Principal               Officer (Principal Financial
Executive Officer)                         Officer and Principal Accounting
Dated:  May 29, 2001                       Officer)
                                           Dated:  May 29, 2001


/s/ Robert Sands                           /s/ George Bresler
---------------------------------          ----------------------------------
Robert Sands, Director                     George Bresler, Director
Dated:  May 29, 2001                       Dated:  May 29, 2001


/s/ James A. Locke                         /s/ Thomas C. McDermott
---------------------------------          ----------------------------------
James A. Locke, III, Director              Thomas C. McDermott, Director
Dated:  May 29, 2001                       Dated:  May 29, 2001


/s/ Paul L. Smith                          /s/ Jeananne K. Hauswald
---------------------------------          ----------------------------------
Paul L. Smith, Director                    Jeananne K. Hauswald, Director
Dated:  May 29, 2001                       Dated:  May 29, 2001




<PAGE>
                                     - 73 -

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 29, 2001                   Batavia Wine Cellars, Inc.


                                       By: /s/ Ned Cooper
                                           ----------------------------------
                                           Ned Cooper, President

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.


Dated:  May 29, 2001                       /s/ Ned Cooper
                                           ----------------------------------
                                           Ned Cooper, President
                                           (Principal Executive Officer)


Dated:  May 29, 2001                       /s/ Thomas S. Summer
                                           ----------------------------------
                                           Thomas S. Summer, Treasurer
                                           (Principal Financial Officer and
                                           Principal Accounting Officer)


Dated:  May 29, 2001                       /s/ Richard Sands
                                           ----------------------------------
                                           Richard Sands, Director


Dated:  May 29, 2001                       /s/ Robert Sands
                                           ----------------------------------
                                           Robert Sands, Director





<PAGE>
                                     - 74 -

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 29, 2001                   Canandaigua Wine Company, Inc.


                                       By: /s/ Jon Moramarco
                                           ----------------------------------
                                           Jon Moramarco, President and Chief
                                           Executive Officer

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.


Dated:  May 29, 2001                       /s/ Jon Moramarco
                                           ----------------------------------
                                           Jon Moramarco, President and Chief
                                           Executive Officer (Principal
                                           Executive Officer)


Dated:  May 29, 2001                       /s/ Thomas S. Summer
                                           ----------------------------------
                                           Thomas S. Summer, Treasurer
                                           (Principal Financial Officer and
                                           Principal Accounting Officer)


Dated:  May 29, 2001                       /s/ Richard Sands
                                           ----------------------------------
                                           Richard Sands, Director


Dated:  May 29, 2001                       /s/ Robert Sands
                                           ----------------------------------
                                           Robert Sands, Director




<PAGE>
                                     - 75 -

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 29, 2001                   Canandaigua Europe Limited


                                       By: /s/ Douglas Kahle
                                           ----------------------------------
                                           Douglas Kahle, President

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.


Dated:  May 29, 2001                       /s/ Douglas Kahle
                                           ----------------------------------
                                           Douglas Kahle, President
                                           (Principal Executive Officer)


Dated:  May 29, 2001                       /s/ Thomas S. Summer
                                           ----------------------------------
                                           Thomas S. Summer, Treasurer
                                           (Principal Financial Officer and
                                           Principal Accounting Officer)


Dated:  May 29, 2001                       /s/ Richard Sands
                                           ----------------------------------
                                           Richard Sands, Director




<PAGE>
                                     - 76 -

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 29, 2001                   Canandaigua Limited


                                       By: /s/ Robert Sands
                                           ----------------------------------
                                           Robert Sands, Chief Executive
                                           Officer

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.


Dated:  May 29, 2001                       /s/ Robert Sands
                                           ----------------------------------
                                           Robert Sands, Chief Executive
                                           Officer and Director (Principal
                                           Executive Officer)


Dated:  May 29, 2001                       /s/ Thomas S. Summer
                                           ----------------------------------
                                           Thomas S. Summer, Finance Director
                                           (Principal Financial Officer and
                                           Principal Accounting Officer)


Dated:  May 29, 2001                       /s/ Peter Aikens
                                           ----------------------------------
                                           Peter Aikens, Director


Dated:  May 29, 2001                       /s/ Anne Colquhoun
                                           ----------------------------------
                                           Anne Colquhoun, Director


Dated:  May 29, 2001                       /s/ Nigel Hodges
                                           ----------------------------------
                                           Nigel Hodges, Director




<PAGE>
                                     - 77 -

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 29, 2001                   Polyphenolics, Inc.


                                       By: /s/ Anil Shrikhande
                                           ----------------------------------
                                           Anil Shrikhande, President

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.


Dated:  May 29, 2001                       /s/ Anil Shrikhande
                                           ----------------------------------
                                           Anil Shrikhande, President
                                           (Principal Executive Officer)


Dated:  May 29, 2001                       /s/ Thomas S. Summer
                                           ----------------------------------
                                           Thomas S. Summer, Vice President,
                                           Treasurer and Director (Principal
                                           Financial Officer and Principal
                                           Accounting Officer)

Dated:  May 29, 2001                       /s/ Ronald C. Fondiller
                                           ----------------------------------
                                           Ronald C. Fondiller, Director





<PAGE>
                                     - 78 -

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 29, 2001                   Roberts Trading Corp.


                                       By: /s/ Thomas S. Summer
                                           ----------------------------------
                                           Thomas S. Summer, President and
                                           Treasurer

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.


Dated:  May 29, 2001                       /s/ Thomas S. Summer
                                           ----------------------------------
                                           Thomas S. Summer, President and
                                           Treasurer (Principal Executive
                                           Officer, Principal Financial
                                           Officer and Principal Accounting
                                           Officer)


Dated:  May 29, 2001                       /s/ Richard Sands
                                           ----------------------------------
                                           Richard Sands, Director


Dated:  May 29, 2001                       /s/ Robert Sands
                                           ----------------------------------
                                           Robert Sands, Director



<PAGE>
                                     - 79 -

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 29, 2001                   Canandaigua B.V.


                                       By: /s/ G.A.L.R. Diepenhorst
                                           ----------------------------------
                                           G.A.L.R. Diepenhorst, Managing
                                           Director

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.


Dated:  May 29, 2001                       /s/ G.A.L.R. Diepenhorst
                                           ----------------------------------
                                           G.A.L.R. Diepenhorst, Managing
                                           Director (Principal Executive
                                           Officer)


Dated:  May 29, 2001                       /s/ Thomas S. Summer
                                           ----------------------------------
                                           Thomas S. Summer, Chief Financial
                                           Officer (Principal Financial
                                           Officer and Principal Accounting
                                           Officer)


Dated:  May 29, 2001                       /s/ E.F. Switters
                                           ----------------------------------
                                           E.F. Switters, Managing Director



<PAGE>
                                     - 80 -

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 29, 2001                   Franciscan Vineyards, Inc.


                                       By: /s/ Agustin Francisco Huneeus
                                           ----------------------------------
                                           Agustin Francisco Huneeus,
                                           President

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.


Dated:  May 29, 2001                       /s/ Agustin Francisco Huneeus
                                           ----------------------------------
                                           Agustin Francisco Huneeus,
                                           President (Principal Executive
                                           Officer)


Dated:  May 29, 2001                       /s/ Thomas S. Summer
                                           ----------------------------------
                                           Thomas S. Summer, Vice President
                                           and Treasurer (Principal Financial
                                           Officer and Principal Accounting
                                           Officer)


Dated:  May 29, 2001                       /s/ Richard Sands
                                           ----------------------------------
                                           Richard Sands, Director


Dated:  May 29, 2001                       /s/ Robert Sands
                                           ----------------------------------
                                           Robert Sands, Director



<PAGE>
                                     - 81 -

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 29, 2001                   Allberry, Inc.


                                       By: /s/ Agustin Francisco Huneeus
                                           ----------------------------------
                                           Agustin Francisco Huneeus,
                                           President

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.


Dated:  May 29, 2001                       /s/ Agustin Francisco Huneeus
                                           ----------------------------------
                                           Agustin Francisco Huneeus,
                                           President (Principal Executive
                                           Officer)


Dated:  May 29, 2001                       /s/ Thomas S. Summer
                                           ----------------------------------
                                           Thomas S. Summer, Vice President
                                           and Treasurer (Principal Financial
                                           Officer and Principal Accounting
                                           Officer)


Dated:  May 29, 2001                       /s/ Richard Sands
                                           ----------------------------------
                                           Richard Sands, Director


Dated:  May 29, 2001                       /s/ Robert Sands
                                           ----------------------------------
                                           Robert Sands, Director



<PAGE>
                                     - 82 -

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 29, 2001                   Cloud Peak Corporation


                                       By: /s/ Agustin Francisco Huneeus
                                           ----------------------------------
                                           Agustin Francisco Huneeus,
                                           President

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.


Dated:  May 29, 2001                       /s/ Agustin Francisco Huneeus
                                           ----------------------------------
                                           Agustin Francisco Huneeus,
                                           President (Principal Executive
                                           Officer)


Dated:  May 29, 2001                       /s/ Thomas S. Summer
                                           ----------------------------------
                                           Thomas S. Summer, Vice President
                                           and Treasurer (Principal Financial
                                           Officer and Principal Accounting
                                           Officer)


Dated:  May 29, 2001                       /s/ Richard Sands
                                           ----------------------------------
                                           Richard Sands, Director


Dated:  May 29, 2001                       /s/ Robert Sands
                                           ----------------------------------
                                           Robert Sands, Director



<PAGE>
                                     - 83 -

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 29, 2001                   M.J. Lewis Corp.


                                       By: /s/ Agustin Francisco Huneeus
                                           ----------------------------------
                                           Agustin Francisco Huneeus,
                                           President

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.


Dated:  May 29, 2001                       /s/ Agustin Francisco Huneeus
                                           ----------------------------------
                                           Agustin Francisco Huneeus,
                                           President (Principal Executive
                                           Officer)


Dated:  May 29, 2001                       /s/ Thomas S. Summer
                                           ----------------------------------
                                           Thomas S. Summer, Vice President
                                           and Treasurer (Principal Financial
                                           Officer and Principal Accounting
                                           Officer)


Dated:  May 29, 2001                       /s/ Richard Sands
                                           ----------------------------------
                                           Richard Sands, Director


Dated:  May 29, 2001                       /s/ Robert Sands
                                           ----------------------------------
                                           Robert Sands, Director



<PAGE>
                                     - 84 -

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 29, 2001                   Mt. Veeder Corporation


                                       By: /s/ Agustin Francisco Huneeus
                                           ---------------------------------
                                           Agustin Francisco Huneeus,
                                           President

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.


Dated:  May 29, 2001                       /s/ Agustin Francisco Huneeus
                                           ----------------------------------
                                           Agustin Francisco Huneeus,
                                           President (Principal Executive
                                           Officer)


Dated:  May 29, 2001                       /s/ Thomas S. Summer
                                           ----------------------------------
                                           Thomas S. Summer, Vice President
                                           and Treasurer (Principal Financial
                                           Officer and Principal Accounting
                                           Officer)


Dated:  May 29, 2001                       /s/ Richard Sands
                                           ----------------------------------
                                           Richard Sands, Director


Dated:  May 29, 2001                       /s/ Robert Sands
                                           ----------------------------------
                                           Robert Sands, Director



<PAGE>
                                     - 85 -

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 29, 2001                   Barton Incorporated


                                       By: /s/ Alexander L. Berk
                                           ----------------------------------
                                           Alexander L. Berk, President and
                                           Chief Executive Officer

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.

Dated:  May 29, 2001                       /s/ Alexander L. Berk
                                           ----------------------------------
                                           Alexander L. Berk, President,
                                           Chief Executive Officer and
                                           Director (Principal Executive
                                           Officer)


Dated:  May 29, 2001                       /s/ Thomas S. Summer
                                           ----------------------------------
                                           Thomas S. Summer, Vice President
                                           (Principal Financial Officer and
                                           Principal Accounting Officer)


Dated:  May 29, 2001                       /s/ Troy J. Christensen
                                           ----------------------------------
                                           Troy J. Christensen, Director


Dated:  May 29, 2001                       /s/ Edward L. Golden
                                           ----------------------------------
                                           Edward L. Golden, Director


Dated:  May 29, 2001                       /s/ William F. Hackett
                                           ----------------------------------
                                           William F. Hackett, Director


Dated:  May 29, 2001                       /s/ Elizabeth Kutyla
                                           ----------------------------------
                                           Elizabeth Kutyla, Director


Dated:  May 29, 2001                       /s/ Richard Sands
                                           ----------------------------------
                                           Richard Sands, Director


Dated:  May 29, 2001                       /s/ Robert Sands
                                           ----------------------------------
                                           Robert Sands, Director


<PAGE>
                                     - 86 -

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 29, 2001                   Barton Brands, Ltd.


                                       By: /s/ Edward L. Golden
                                           ----------------------------------
                                           Edward L. Golden, President

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.


Dated:  May 29, 2001                       /s/ Edward L. Golden
                                           ----------------------------------
                                           Edward L. Golden, President and
                                           Director (Principal Executive
                                           Officer)


Dated:  May 29, 2001                       /s/ Thomas S. Summer
                                           ----------------------------------
                                           Thomas S. Summer, Vice President
                                           (Principal Financial Officer and
                                           Principal Accounting Officer)


Dated:  May 29, 2001                       /s/ Alexander L. Berk
                                           ----------------------------------
                                           Alexander L. Berk, Director


Dated:  May 29, 2001                       /s/ Troy J. Christensen
                                           ----------------------------------
                                           Troy J. Christensen, Director


Dated:  May 29, 2001                       /s/ Elizabeth Kutyla
                                           ----------------------------------
                                           Elizabeth Kutyla, Director


<PAGE>
                                     - 87 -

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 29, 2001                   Barton Beers, Ltd.


                                       By: /s/ Richard Sands
                                           ----------------------------------
                                           Richard Sands, Chief Executive
                                           Officer

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.


Dated:  May 29, 2001                       /s/ Richard Sands
                                           ----------------------------------
                                           Richard Sands, Chief Executive
                                           Officer and Director (Principal
                                           Executive Officer)


Dated:  May 29, 2001                       /s/ Thomas S. Summer
                                           ----------------------------------
                                           Thomas S. Summer, Vice President
                                           (Principal Financial Officer and
                                           Principal Accounting Officer)


Dated:  May 29, 2001                       /s/ Alexander L. Berk
                                           ----------------------------------
                                           Alexander L. Berk, Director


Dated:  May 29, 2001                       /s/ Troy J. Christensen
                                           ----------------------------------
                                           Troy J. Christensen, Director


Dated:  May 29, 2001                       /s/ William F. Hackett
                                           ----------------------------------
                                           William F. Hackett, Director


Dated:  May 29, 2001                       /s/ Elizabeth Kutyla
                                           ----------------------------------
                                           Elizabeth Kutyla, Director


<PAGE>
                                     - 88 -

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 29, 2001                   Barton Brands of California, Inc.


                                       By: /s/ Alexander L. Berk
                                           ----------------------------------
                                           Alexander L. Berk, President

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.


Dated:  May 29, 2001                       /s/ Alexander L. Berk
                                           ----------------------------------
                                           Alexander L. Berk, President and
                                           Director (Principal Executive
                                           Officer)


Dated:  May 29, 2001                       /s/ Thomas S. Summer
                                           ----------------------------------
                                           Thomas S. Summer, Vice President
                                           (Principal Financial Officer and
                                           Principal Accounting Officer)


Dated:  May 29, 2001                       /s/ Troy J. Christensen
                                           ----------------------------------
                                           Troy J. Christensen, Director


Dated:  May 29, 2001                       /s/ Edward L. Golden
                                           ----------------------------------
                                           Edward L. Golden, Director


Dated:  May 29, 2001                       /s/ Elizabeth Kutyla
                                           ----------------------------------
                                           Elizabeth Kutyla, Director


<PAGE>
                                     - 89 -

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 29, 2001                   Barton Brands of Georgia, Inc.


                                       By: /s/ Alexander L. Berk
                                           ----------------------------------
                                           Alexander L. Berk, President

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.


Dated:  May 29, 2001                       /s/ Alexander L. Berk
                                           ----------------------------------
                                           Alexander L. Berk, President and
                                           Director (Principal Executive
                                           Officer)


Dated:  May 29, 2001                       /s/ Thomas S. Summer
                                           ----------------------------------
                                           Thomas S. Summer, Vice President
                                           (Principal Financial Officer and
                                           Principal Accounting Officer)


Dated:  May 29, 2001                       /s/ Troy J. Christensen
                                           ----------------------------------
                                           Troy J. Christensen, Director


Dated:  May 29, 2001                       /s/ Edward L. Golden
                                           ----------------------------------
                                           Edward L. Golden, Director


Dated:  May 29, 2001                       /s/ Elizabeth Kutyla
                                           ----------------------------------
                                           Elizabeth Kutyla, Director

<PAGE>
                                     - 90 -

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 29, 2001                   Barton Canada, Ltd.


                                       By: /s/ Alexander L. Berk
                                           ----------------------------------
                                           Alexander L. Berk, President

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.


Dated:  May 29, 2001                       /s/ Alexander L. Berk
                                           ----------------------------------
                                           Alexander L. Berk, President and
                                           Director (Principal Executive
                                           Officer)


Dated:  May 29, 2001                       /s/ Thomas S. Summer
                                           ----------------------------------
                                           Thomas S. Summer, Vice President
                                           (Principal Financial Officer and
                                           Principal Accounting Officer)


Dated:  May 29, 2001                       /s/ Troy J. Christensen
                                           ----------------------------------
                                           Troy J. Christensen, Director


Dated:  May 29, 2001                       /s/ Edward L. Golden
                                           ----------------------------------
                                           Edward L. Golden, Director


Dated:  May 29, 2001                       /s/ Elizabeth Kutyla
                                           ----------------------------------
                                           Elizabeth Kutyla, Director


<PAGE>
                                     - 91 -

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 29, 2001                   Barton Distillers Import Corp.


                                       By: /s/ Alexander L. Berk
                                           ----------------------------------
                                           Alexander L. Berk, President

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.


Dated:  May 29, 2001                       /s/ Alexander L. Berk
                                           ----------------------------------
                                           Alexander L. Berk, President and
                                           Director (Principal Executive
                                           Officer)


Dated:  May 29, 2001                       /s/ Thomas S. Summer
                                           ----------------------------------
                                           Thomas S. Summer, Vice President
                                           (Principal Financial Officer and
                                           Principal Accounting Officer)


Dated:  May 29, 2001                       /s/ Troy J. Christensen
                                           ----------------------------------
                                           Troy J. Christensen, Director


Dated:  May 29, 2001                       /s/ Edward L. Golden
                                           ----------------------------------
                                           Edward L. Golden, Director


Dated:  May 29, 2001                       /s/ Elizabeth Kutyla
                                           ----------------------------------
                                           Elizabeth Kutyla, Director

<PAGE>
                                     - 92 -

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 29, 2001                   Barton Financial Corporation


                                       By: /s/ Troy J. Christensen
                                           ----------------------------------
                                           Troy J. Christensen, President

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.


Dated:  May 29, 2001                       /s/ Troy J. Christensen
                                           ----------------------------------
                                           Troy J. Christensen, President,
                                           Secretary and Director (Principal
                                           Executive Officer)


Dated:  May 29, 2001                       /s/ Thomas S. Summer
                                           ----------------------------------
                                           Thomas S. Summer, Vice President
                                           (Principal Financial Officer and
                                           Principal Accounting Officer)


Dated:  May 29, 2001                       /s/ Michael A. Napientek
                                           ----------------------------------
                                           Michael A. Napientek, Director


<PAGE>
                                     - 93 -

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 29, 2001                   Stevens Point Beverage Co.


                                       By: /s/ James P. Ryan
                                           ----------------------------------
                                           James P. Ryan, President and Chief
                                           Executive Officer

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.


Dated:  May 29, 2001                       /s/ James P. Ryan
                                           ----------------------------------
                                           James P. Ryan, President, Chief
                                           Executive Officer and Director
                                           (Principal Executive Officer)


Dated:  May 29, 2001                       /s/ Thomas S. Summer
                                           ----------------------------------
                                           Thomas S. Summer, Vice President
                                           (Principal Financial Officer and
                                           Principal Accounting Officer)


Dated:  May 29, 2001                       /s/ Alexander L. Berk
                                           ----------------------------------
                                           Alexander L. Berk, Director


Dated:  May 29, 2001                       /s/ Troy J. Christensen
                                           ----------------------------------
                                           Troy J. Christensen, Director


Dated:  May 29, 2001                       /s/ William F. Hackett
                                           ----------------------------------
                                           William F. Hackett, Director


Dated:  May 29, 2001                       /s/ Elizabeth Kutyla
                                           ----------------------------------
                                           Elizabeth Kutyla, Director


<PAGE>
                                     - 94 -

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  May 29, 2001                   Monarch Import Company


                                       By: /s/ James P. Ryan
                                           ----------------------------------
                                           James P. Ryan, Chief Executive
                                           Officer

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.


Dated:  May 29, 2001                       /s/ James P. Ryan
                                           ----------------------------------
                                           James P. Ryan, Chief Executive
                                           Officer (Principal Executive
                                           Officer)


Dated:  May 29, 2001                       /s/ Thomas S. Summer
                                           ----------------------------------
                                           Thomas S. Summer, Vice President
                                           (Principal Financial Officer and
                                           Principal Accounting Officer)


Dated:  May 29, 2001                       /s/ Alexander L. Berk
                                           ----------------------------------
                                           Alexander L. Berk, Director


Dated:  May 29, 2001                       /s/ Troy J. Christensen
                                           ----------------------------------
                                           Troy J. Christensen, Director


Dated:  May 29, 2001                       /s/ William F. Hackett
                                           ----------------------------------
                                           William F. Hackett, Director


Dated:  May 29, 2001                       /s/ Elizabeth Kutyla
                                           ----------------------------------
                                           Elizabeth Kutyla, Director

<PAGE>
                                     - 95 -

                               INDEX TO EXHIBITS

Exhibit No.
-----------

        2.1     Recommended  Cash Offer,  by Schroders on behalf of  Canandaigua
                Limited,  a wholly-owned  subsidiary of the Company,  to acquire
                Matthew Clark plc (filed as Exhibit 2.1 to the Company's Current
                Report  on Form 8-K  dated  December  1,  1998 and  incorporated
                herein by reference).

        2.2     Asset  Purchase  Agreement  dated as of February 21, 1999 by and
                among Diageo Inc.,  UDV Canada Inc.,  United  Distillers  Canada
                Inc.  and the  Company  (filed  as  Exhibit  2 to the  Company's
                Current Report on Form 8-K dated April 9, 1999 and  incorporated
                herein by reference).

        2.3     Stock  Purchase   Agreement,   dated  April  21,  1999,  between
                Franciscan Vineyards,  Inc., Agustin Huneeus,  Agustin Francisco
                Huneeus,  Jean-Michel Valette,  Heidrun Eckes-Chantre Und Kinder
                Beteiligungsverwaltung  II,  GbR,  Peter  Eugen Eckes Und Kinder
                Beteiligungsverwaltung II, GbR, Harald Eckes-Chantre,  Christina
                Eckes-Chantre,  Petra Eckes-Chantre and Canandaigua Brands, Inc.
                (now known as Constellation  Brands, Inc.) (filed as Exhibit 2.1
                to the Company's  Current  Report on Form 8-K dated June 4, 1999
                and incorporated herein by reference).

        2.4     Stock  Purchase  Agreement  by  and  between   Canandaigua  Wine
                Company,  Inc. (a  wholly-owned  subsidiary  of the Company) and
                Moet Hennessy,  Inc. dated April 1,1999 (filed as exhibit 2.3 to
                the  Company's  Quarterly  Report  on Form  10-Q for the  fiscal
                quarter   ended  May  31,  1999  and   incorporated   herein  by
                reference).

        2.5     Purchase  Agreement  dated as of January 30, 2001,  by and among
                Sebastiani  Vineyards,  Inc.,  Tuolomne River Vintners Group and
                Canandaigua Wine Company, Inc. (a wholly-owned subsidiary of the
                Company)  (including a list briefly  identifying the contents of
                all omitted  schedules  thereto) (filed  herewith).  The Company
                will furnish  supplementally to the Commission,  upon request, a
                copy of any omitted schedule.

        3.1     Restated  Certificate of  Incorporation of the Company (filed as
                Exhibit 3.1 to the Company's  Quarterly  Report on Form 10-Q for
                the fiscal quarter ended August 31, 2000 and incorporated herein
                by reference).

        3.2     By-Laws of the Company  (filed as Exhibit  3.2 to the  Company's
                Quarterly  Report  on Form  10-Q for the  fiscal  quarter  ended
                August 31, 2000 and incorporated herein by reference).

        4.1     Indenture,  with respect to 8 3/4% Senior Subordinated Notes due
                2003,  dated as of December  27, 1993,  among the  Company,  its
                Subsidiaries  and The  Chase  Manhattan  Bank (as  successor  to
                Chemical Bank) (filed as Exhibit 4.1 to the Company's  Quarterly
                Report on Form 10-Q for the fiscal  quarter  ended  November 30,
                1993 and incorporated herein by reference).

        4.2     First Supplemental Indenture,  dated as of August 3, 1994, among
                the Company, Canandaigua West, Inc. (a subsidiary of the Company
                now  known as  Canandaigua  Wine  Company,  Inc.)  and The Chase
                Manhattan Bank (as successor to Chemical Bank) (filed as Exhibit
                4.5  to  the  Company's   Registration  Statement  on  Form  S-8
                (Registration   No.  33-56557)   and   incorporated   herein  by
                reference).

<PAGE>
                                     - 96 -

        4.3     Second Supplemental Indenture,  dated August 25, 1995, among the
                Company,  V  Acquisition  Corp. (a subsidiary of the Company now
                known as The Viking  Distillery,  Inc.) and The Chase  Manhattan
                Bank (as  successor  to Chemical  Bank) (filed as Exhibit 4.5 to
                the  Company's  Annual  Report on Form 10-K for the fiscal  year
                ended August 31, 1995 and incorporated herein by reference).

        4.4     Third  Supplemental  Indenture,  dated as of December  19, 1997,
                among the Company,  Canandaigua Europe Limited,  Roberts Trading
                Corp. and The Chase  Manhattan Bank (filed as Exhibit 4.4 to the
                Company's  Annual  Report on Form 10-K for the fiscal year ended
                February 28, 1998 and incorporated herein by reference).

        4.5     Fourth  Supplemental  Indenture,  dated as of  October  2, 1998,
                among the Company,  Polyphenolics,  Inc. and The Chase Manhattan
                Bank (filed as Exhibit 4.5 to the Company's  Quarterly Report on
                Form 10-Q for the fiscal  quarter  ended  November  30, 1998 and
                incorporated herein by reference).

        4.6     Fifth  Supplemental  Indenture,  dated as of December  11, 1998,
                among the Company, Canandaigua B.V., Canandaigua Limited and The
                Chase  Manhattan  Bank  (filed as Exhibit  4.6 to the  Company's
                Annual  Report on Form 10-K for the fiscal  year ended  February
                28, 1999 and incorporated herein by reference).

        4.7     Sixth Supplemental  Indenture,  dated as of July 28, 1999, among
                the Company,  Barton Canada, Ltd., Simi Winery, Inc., Franciscan
                Vineyards,  Inc.,  Allberry,  Inc., M.J. Lewis Corp., Cloud Peak
                Corporation,  Mt. Veeder Corporation,  SCV-EPI Vineyards,  Inc.,
                and The Chase  Manhattan  Bank, as Trustee (filed as Exhibit 4.7
                to the  Company's  Quarterly  Report on Form 10-Q for the fiscal
                quarter  ended  August  31,  1999  and  incorporated  herein  by
                reference).

        4.8     Indenture   with   respect  to  the  8  3/4%   Series  C  Senior
                Subordinated Notes due 2003, dated as of October 29, 1996, among
                the Company,  its Subsidiaries and Harris Trust and Savings Bank
                (filed as Exhibit 4.2 to the Company's Registration Statement on
                Form S-4 (Registration No. 333-17673) and incorporated herein by
                reference).

        4.9     First  Supplemental  Indenture,  dated as of December  19, 1997,
                among the Company,  Canandaigua Europe Limited,  Roberts Trading
                Corp. and Harris Trust and Savings Bank (filed as Exhibit 4.6 to
                the  Company's  Annual  Report on Form 10-K for the fiscal  year
                ended February 28, 1998 and incorporated herein by reference).

        4.10    Second  Supplemental  Indenture,  dated as of  October  2, 1998,
                among the  Company,  Polyphenolics,  Inc.  and Harris  Trust and
                Savings  Bank (filed as Exhibit 4.8 to the  Company's  Quarterly
                Report on Form 10-Q for the fiscal  quarter  ended  November 30,
                1998 and incorporated herein by reference).

        4.11    Third  Supplemental  Indenture,  dated as of December  11, 1998,
                among the Company,  Canandaigua  B.V.,  Canandaigua  Limited and
                Harris  Trust and  Savings  Bank  (filed as Exhibit  4.10 to the
                Company's  Annual  Report on Form 10-K for the fiscal year ended
                February 28, 1999 and incorporated herein by reference).

        4.12    Fourth Supplemental Indenture,  dated as of July 28, 1999, among
                the Company,  Barton Canada, Ltd., Simi Winery, Inc., Franciscan
                Vineyards,  Inc.,  Allberry,  Inc., M.J. Lewis Corp., Cloud Peak
                Corporation,  Mt. Veeder Corporation,  SCV-EPI Vineyards,  Inc.,
                and Harris Trust

<PAGE>
                                     - 97 -

                and  Savings  Bank,  as Trustee  (filed as  Exhibit  4.12 to the
                Company's  Quarterly  Report on Form 10-Q for the fiscal quarter
                ended August 31, 1999 and incorporated herein by reference).

        4.13    Indenture,  dated as of February 25, 1999, among the Company, as
                issuer,  certain  principal  subsidiaries,  as  Guarantors,  and
                Harris Trust and Savings Bank, as Trustee (filed as Exhibit 99.1
                to the Company's  Current  Report on Form 8-K dated February 25,
                1999 and incorporated herein by reference).

        4.14    Supplemental  Indenture  No. 1, with  respect  to 8 1/2%  Senior
                Subordinated  Notes due 2009,  dated as of February 25, 1999, by
                and  among   the   Company,   as   Issuer,   certain   principal
                subsidiaries,  as Guarantors, and Harris Trust and Savings Bank,
                as  Trustee  (filed as  Exhibit  99.2 to the  Company's  Current
                Report  on Form 8-K dated  February  25,  1999 and  incorporated
                herein by reference).

        4.15    Supplemental  Indenture  No. 2, with  respect  to 8 5/8%  Senior
                Notes due 2006,  dated as of  August 4,  1999,  by and among the
                Company,   as  Issuer,   certain  principal   subsidiaries,   as
                Guarantors, and Harris Trust and Savings Bank, as Trustee (filed
                as Exhibit 4.1 to the Company's Current Report on Form 8-K dated
                July 28, 1999 and incorporated herein by reference).

        4.16    Supplemental Indenture No. 3, dated as of August 6, 1999, by and
                among the Company,  Canandaigua B.V., Barton Canada,  Ltd., Simi
                Winery, Inc., Franciscan Vineyards,  Inc., Allberry,  Inc., M.J.
                Lewis Corp.,  Cloud Peak  Corporation,  Mt. Veeder  Corporation,
                SCV-EPI  Vineyards,  Inc., and Harris Trust and Savings Bank, as
                Trustee (filed as Exhibit 4.20 to the Company's Quarterly Report
                on Form 10-Q for the fiscal  quarter  ended  August 31, 1999 and
                incorporated herein by reference).

        4.17    Supplemental  Indenture  No. 4, with  respect  to 8 1/2%  Senior
                Notes  due  2009,  dated as of May 15,  2000,  by and  among the
                Company,   as  Issuer,   certain  principal   subsidiaries,   as
                Guarantors, and Harris Trust and Savings Bank, as Trustee (filed
                as Exhibit 4.17 to the Company's  Annual Report on Form 10-K for
                the fiscal year ended February 29, 2000 and incorporated  herein
                by reference).

        4.18    Supplemental Indenture No. 5, dated as of September 14, 2000, by
                and  among   the   Company,   as   Issuer,   certain   principal
                subsidiaries,  as  Guarantors,  and  The  Bank of New  York,  as
                Trustee (filed as Exhibit 4.1 to the Company's  Quarterly Report
                on Form 10-Q for the fiscal  quarter  ended  August 31, 2000 and
                incorporated herein by reference).

        4.19    Credit  Agreement,  dated as of  October 6,  1999,  between  the
                Company,  certain principal subsidiaries,  and certain banks for
                which The Chase Manhattan Bank acts as Administrative Agent, The
                Bank of Nova Scotia acts as Syndication Agent, and Credit Suisse
                First Boston and Citicorp  USA,  Inc.  acts as  Co-Documentation
                Agents (filed as Exhibit 4.1 to the Company's  Quarterly  Report
                on Form 10-Q for the fiscal  quarter ended November 30, 1999 and
                incorporated herein by reference).

        4.20    Amendment  No. 1 to Credit  Agreement,  dated as of February 13,
                2001, between the Company,  certain principal subsidiaries,  and
                The Chase  Manhattan Bank, as  administrative  agent for certain
                banks (filed herewith).

        4.21    Indenture,  with respect to 8 1/2% Senior Notes due 2009,  dated
                as of November 17, 1999, among the Company,  as Issuer,  certain
                principal  subsidiaries,  as  Guarantors,  and Harris  Trust and
                Savings Bank, as Trustee  (filed as Exhibit 4.1 to the Company's
                Registration  Statement on Form S-4 (Registration No. 333-94369)
                and incorporated herein by reference).

<PAGE>
                                     - 98 -

        4.22    Indenture, with respect to 8% Senior Notes due 2008, dated as of
                February 21, 2001, by and among the Company, as Issuer,  certain
                principal  subsidiaries,  as  Guarantors  and BNY Midwest  Trust
                Company,  as  Trustee  (filed as  Exhibit  4.1 to the  Company's
                Registration  Statement  filed  on Form  S-4  (Registration  No.
                333-60720) and incorporated herein by reference).

        4.23    Registration Rights Agreement, dated as of February 21, 2001, by
                and among the  Company,  certain  subsidiaries  and the  Initial
                Purchasers  named therein (filed as Exhibit 4.2 to the Company's
                Registration  Statement  filed  on Form  S-4  (Registration  No.
                333-60720) and incorporated herein by reference).

        10.1    Barton Incorporated  Management Incentive Plan (filed as Exhibit
                10.6 to the Company's  Annual Report on Form 10-K for the fiscal
                year  ended   August  31,  1993  and   incorporated   herein  by
                reference).

        10.2    Marvin Sands Split Dollar Insurance  Agreement (filed as Exhibit
                10.9 to the Company's  Annual Report on Form 10-K for the fiscal
                year  ended   August  31,  1993  and   incorporated   herein  by
                reference).

        10.3    Employment  Agreement between Barton  Incorporated and Alexander
                L. Berk dated as of  September  1, 1990 as amended by  Amendment
                No. 1 to Employment  Agreement  between Barton  Incorporated and
                Alexander L. Berk dated November 11, 1996 (filed as Exhibit 10.7
                to the Company's  Annual Report on Form 10-K for the fiscal year
                ended February 28, 1998 and incorporated herein by reference).

        10.4    Amendment  No.  2  to  Employment   Agreement   between   Barton
                Incorporated and Alexander L. Berk dated October 20, 1998 (filed
                as Exhibit 10.5 to the Company's  Annual Report on Form 10-K for
                the fiscal year ended February 28, 1999 and incorporated  herein
                by reference).

        10.5    Long-Term Stock  Incentive  Plan,  which amends and restates the
                Canandaigua   Wine   Company,   Inc.   Stock  Option  and  Stock
                Appreciation  Right Plan (filed as Exhibit 10.1 to the Company's
                Quarterly  Report on Form 10-Q for the fiscal  quarter ended May
                31, 1997 and incorporated herein by reference).

        10.6    Amendment Number One to the Company's  Long-Term Stock Incentive
                Plan (filed as Exhibit 10.1 to the Company's Quarterly Report on
                Form 10-Q for the  fiscal  quarter  ended  August  31,  1997 and
                incorporated herein by reference).

        10.7    Amendment Number Two to the Company's  Long-Term Stock Incentive
                Plan (filed as Exhibit 10 to the Company's  Quarterly  Report on
                Form 10-Q for the  fiscal  quarter  ended  August  31,  1999 and
                incorporated herein by reference).

        10.8    Amendment   Number  Three  to  the  Company's   Long-Term  Stock
                Incentive Plan (filed as Exhibit 10.1 to the Company's Quarterly
                Report on Form 10-Q for the fiscal quarter ended August 31, 2000
                and incorporated herein by reference).

        10.9    Amendment Number Four to the Company's Long-Term Stock Incentive
                Plan (filed herewith).

        10.10   Incentive  Stock  Option Plan of the  Company  (filed as Exhibit
                10.2 to the  Company's  Quarterly  Report  on Form  10-Q for the
                fiscal quarter ended August 31, 1997 and incorporated  herein by
                reference).

<PAGE>
                                     - 99 -

        10.11   Amendment  Number One to the  Company's  Incentive  Stock Option
                Plan (filed as Exhibit 10.3 to the Company's Quarterly Report on
                Form 10-Q for the  fiscal  quarter  ended  August  31,  1997 and
                incorporated herein by reference).

        10.12   Amendment  Number Two to the  Company's  Incentive  Stock Option
                Plan (filed as Exhibit 10.2 to the Company's Quarterly Report on
                Form 10-Q for the  fiscal  quarter  ended  August  31,  2000 and
                incorporated herein by reference).

        10.13   Amendment  Number Three to the Company's  Incentive Stock Option
                Plan (filed herewith).

        10.14   Annual  Management  Incentive  Plan  of the  Company  (filed  as
                Exhibit 10.4 to the Company's  Quarterly Report on Form 10-Q for
                the fiscal quarter ended August 31, 1997 and incorporated herein
                by reference).

        10.15   Amendment  Number  One  to  the  Company's   Annual   Management
                Incentive  Plan (filed as Exhibit 10.14 to the Company's  Annual
                Report on Form 10-K for the fiscal year ended  February 28, 1998
                and incorporated herein by reference).

        10.16   Amendment  Number  Two  to  the  Company's   Annual   Management
                Incentive Plan (filed herewith).

        10.17   Lease,  effective  December 25, 1997, by and among Matthew Clark
                Brands  Limited  and  Pontsarn  Investments  Limited  (filed  as
                Exhibit  10.13 to the  Company's  Annual Report on Form 10-K for
                the fiscal year ended February 28, 1999 and incorporated  herein
                by reference).

        10.18   Supplemental  Executive Retirement Plan of the Company (filed as
                Exhibit  10.14 to the  Company's  Annual Report on Form 10-K for
                the fiscal year ended February 28, 1999 and incorporated  herein
                by reference).

        10.19   First   Amendment  to  the  Company's   Supplemental   Executive
                Retirement Plan (filed as Exhibit 10 to the Company's  Quarterly
                Report on Form 10-Q for the fiscal  quarter  ended May 31,  1999
                and incorporated herein by reference).

        10.20   Second  Amendment  to  the  Company's   Supplemental   Executive
                Retirement Plan (filed herewith).

        10.21   Credit  Agreement,  dated as of  October 6,  1999,  between  the
                Company,  certain principal subsidiaries,  and certain banks for
                which The Chase Manhattan Bank acts as Administrative Agent, The
                Bank of Nova Scotia acts as Syndication Agent, and Credit Suisse
                First Boston and Citicorp  USA,  Inc.  acts as  Co-Documentation
                Agents (filed as Exhibit 4.1 to the Company's  Quarterly  Report
                on Form 10-Q for the fiscal  quarter ended November 30, 1999 and
                incorporated herein by reference).

        10.22   Amendment  No. 1 to Credit  Agreement,  dated as of February 13,
                2001, between the Company,  certain principal subsidiaries,  and
                The Chase  Manhattan Bank, as  administrative  agent for certain
                banks (filed herewith as Exhibit 4.20).

        10.23   Letter Agreement between the Company and Thomas S. Summer, dated
                March 10, 1997, addressing  compensation (filed as Exhibit 10.16
                to the Company's  Annual Report on Form 10-K for the fiscal year
                ended February 29, 2000 and incorporated herein by reference).

        10.24   Letter  Agreement  between the Company and Jon Moramarco,  dated
                October 5, 1999, addressing compensation (filed herewith).

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        11.1    Statement re Computation of Per Share Earnings (filed herewith).

        21.1    Subsidiaries of Company (filed herewith).

        23.1    Consent of Arthur Andersen LLP (filed herewith).

        99.1    1989 Employee Stock Purchase Plan of the Company,  as amended by
                Amendment Number 1 through  Amendment Number 5 (filed as Exhibit
                99.1 to the Company's  Annual Report on Form 10-K for the fiscal
                year  ended  February  28,  1998  and  incorporated   herein  by
                reference).

        99.2    Amendment Number 6 to the Company's 1989 Employee Stock Purchase
                Plan (filed as Exhibit 99.2 to the  Company's  Annual  Report on
                Form  10-K for the  fiscal  year  ended  February  28,  1999 and
                incorporated herein by reference).

        99.3    Amendment Number 7 to the Company's 1989 Employee Stock Purchase
                Plan (filed herewith).