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 29, 2000
                           -----------------

                                       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. 0-7570

Delaware               CANANDAIGUA 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
                                                           --------------



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

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


           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
Canandaigua Brands, Inc., as of May 15, 2000, was $725,728,942.

The number of shares  outstanding  with respect to each of the classes of common
stock of Canandaigua  Brands,  Inc., as of May 15, 2000, is set forth below (all
of the Registrants,  other than Canandaigua Brands, Inc., are direct or indirect
wholly-owned subsidiaries of Canandaigua Brands, Inc.):

                  Class                             Number of Shares Outstanding
                  -----                             ----------------------------
Class A Common Stock, par value $.01 per share                15,159,951
Class B Common Stock, par value $.01 per share                 3,096,572


                       DOCUMENTS INCORPORATED BY REFERENCE

The proxy  statement  of  Canandaigua  Brands,  Inc. to be issued for the annual
meeting of stockholders to be held July 18, 2000 is incorporated by reference in
Part III.

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



                                     PART I

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

     Unless  the  context  otherwise  requires,  the term  "Company"  refers  to
Canandaigua 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 2000",
"Fiscal 1999" and "Fiscal  1998" shall refer to the Company's  fiscal year ended
the last day of February of the indicated year.

     Industry  data  disclosed  in this  Annual  Report  on Form  10-K  has been
obtained from the following industry and government  publications:  Adams Liquor
Handbook;  Adams Wine  Handbook;  Adams Beer  Handbook;  Adam's  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
and Office for National  Statistics  (U.K.).  The Company has not  independently
verified this data.  References to positions within industries are based on unit
volume.

     The Company is a leading  producer and marketer of branded beverage alcohol
products  in North  America  and the  United  Kingdom.  According  to  available
industry  data,  the Company ranks as the second  largest  supplier of wine, the
second  largest  importer of beer and the fourth  largest  supplier of distilled
spirits in the United States.  The Company's British  subsidiary,  Matthew Clark
plc ("Matthew  Clark"),  is a leading  producer and marketer of cider,  wine and
bottled water,  and a leading  independent  beverage  alcohol  wholesaler in the
United Kingdom.

     The Company is a Delaware corporation organized in 1972 as the successor to
a business  founded in 1945.  The Company  has  aggressively  pursued  growth in
recent years through acquisitions,  brand development, new product offerings and
new distribution  agreements.  The recent acquisitions of Franciscan  Vineyards,
Inc.  ("Franciscan  Estates") and Simi Winery,  Inc. ("Simi"),  the Black Velvet
Assets (as defined  below) and  Matthew  Clark  continued a series of  strategic
acquisitions  made by the  Company  since 1991 by which it has  diversified  its
offerings and as a result,  increased its market share, net sales and cash flow.
The Company has also achieved  internal  growth by  developing  new products and
repositioning  existing  brands to focus on the fastest  growing  sectors of the
beverage alcohol industry.

     The Company  markets and sells more than 185  premier  branded  products in
North America and the United Kingdom.  The Company's products are distributed by
more than 1,000 wholesalers in North America. In the United Kingdom, the Company
also  distributes its own branded  products and those of other companies to more
than 16,000 customers.  The Company operates more than 20 production  facilities
throughout the world and purchases products for resale from other producers.

ACQUISITIONS IN FISCAL 2000 AND FISCAL 1999

     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").  Franciscan Estates is one of the
foremost   super-premium  and   ultra-premium   wine  companies  in  California.
Franciscan  Estates' net sales for its fiscal year ended December 31, 1998, were
approximately  $50 million on volume of approximately  600,000 cases.  While the
super-premium and ultra-premium wine categories represented only 9% of the total
United States wine market by volume in 1997, they accounted for more than 25% of
sales dollars.  Super-premium and ultra-premium  wine sales in the United States
grew at an  annual  rate of 16%  between  1995 and 1998 and  Franciscan  Estates
recorded a compound annual growth rate of more than 17% for the same period.

     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. 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.  The
Franciscan Estates and Simi operations complement each other and offer synergies
in the areas of sales and  distribution,  grape usage and capacity  utilization.
Together,  Franciscan  Estates and Simi represent the sixth largest  presence in
the  super-premium  and  ultra-premium  wine  categories.  The Company  operates
Franciscan  Estates  and Simi,  and their  properties,  together  as a  separate
business  segment  (collectively,  "Franciscan").  The Company's  strategy is to
further penetrate the super-premium  and  ultra-premium  wine categories,  which
have higher gross profit margins than popularly-priced wine.

     ACQUISITION OF BLACK VELVET CANADIAN WHISKY BRAND AND RELATED 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  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  addition  of  the  Canadian   whisky  brands  from  this   transaction
strengthens  the  Company's  position in the North  American  distilled  spirits
category  and  enhances   the   Company's   portfolio  of  brands  and  category
participation.  The acquired  operations have been integrated with the Company's
existing spirits business.

     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"). Matthew Clark grew substantially in the 1990s
through a series of strategic  acquisitions,  including Grants of St. James's in
1993, the Gaymer Group in 1994 and Taunton Cider Co. in 1995. These acquisitions
served  to  solidify  Matthew  Clark's  position  within  its  key  markets  and
contributed  to an  increase  in net sales to  approximately  $671  million  for
Matthew Clark's fiscal year ended April 30, 1998.  Matthew Clark has developed a
number of leading market positions, including positions as a leading independent
beverage  supplier to the on-premise  trade,  the number one producer of branded
boxed wine,  the number one branded  producer of  fortified  British  wine,  the
number one branded  bottler of  sparkling  water and the number two  producer of
cider.

     The Matthew Clark  Acquisition  strengthens  the Company's  position in the
beverage alcohol industry by providing the Company with 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  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  popularly-priced 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).

     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 16 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  70 countries  from the United States.
Canandaigua Wine sells table wine, dessert wine,  sparkling wine and brandy. Its
leading   brands  include   Almaden,   Inglenook,   Arbor  Mist,   Paul  Masson,
Manischewitz,  Taylor,  Marcus  James,  Estate  Cellars,  Vina  Santa  Carolina,
Dunnewood,  Mystic Cliffs,  Cook's, J. Roget,  Richards Wild Irish Rose and Paul
Masson Grande Amber Brandy. Most of its wine is marketed in the popularly-priced
category of the wine market.

     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 bulk wine,
cooking wine, grape juice and Inglenook-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 number one imported beer nationwide.
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  15 countries  from the
United   States.   Barton's   principal   distilled   spirits   brands   include
Fleischmann's, Mr. Boston, Canadian LTD, Chi-Chi's prepared cocktails, Ten High,
Montezuma,  Barton,  Monte Alban,  Inver House and the recently  acquired  Black
Velvet  brand.  Substantially  all of Barton's  spirits unit volume  consists of
products  marketed in the price  value  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  distributor  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  markets and these brands compete
in both the mainstream and premium brand  categories.  Matthew  Clark's  leading
mainstream cider brands include Blackthorn and Gaymer's Olde English. Blackthorn
is the number two mainstream cider brand and Gaymer's Olde English is the U.K.'s
second  largest cider brand in the take-home  market.  Matthew  Clark's  leading
premium cider brands are Diamond White and K.

     Matthew Clark is the largest  supplier of wine to the  on-premise  trade in
the United Kingdom. Its Stowells of Chelsea brand maintains the leading share in
the branded boxed wine segment.  Matthew Clark also  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
leading bottled sparkling water brand in the country.

     Matthew Clark is a leading independent  beverage supplier 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, spirits,  cider,
beer and soft  drinks.  While these  products  are  primarily  produced by third
parties, they also include Matthew Clark's cider and wine branded products.

     FRANCISCAN

     The Company's Franciscan segment is comprised of the Franciscan Estates and
Simi portfolios.  These  operations are managed together as a separate  business
segment of the  Company,  and  position  the  Company  as a major  player in the
super-premium  and  ultra-premium  wine  market.  Franciscan  also  exports  its
products to approximately 25 countries from the United States.

     Franciscan  includes  the  prestigious  Franciscan  Oakville  Estate  (Napa
Valley), Estancia (Monterey and Sonoma), Simi (Sonoma), Mt. Veeder and Quintessa
(Napa Valley), and Veramonte  (Casablanca Valley, Chile) wines. The portfolio of
fine wines is  supported  by the  segment'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.

     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.

     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.

     During Fiscal 2000, the Company  increased its advertising  expenditures to
put  more  emphasis  on  consumer  advertising  for its  imported  beer  brands,
primarily with respect to the Mexican brands. In addition,  promotional spending
for the Company's wine brands increased to address competitive factors.

     UNITED KINGDOM

     The Company's  U.K.-produced  branded products are marketed and 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
12  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,   cash-and-carry
outlets and wholesalers.

     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 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 the Company from  importing  other
beer from the same country. The Company's agreement to distribute Corona and its
other  Mexican beer brands  exclusively  throughout  25 primarily  U.S.  western
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.  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 its 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 the  leading  brands and most of the
other 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 have  significantly
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 Robert Mondavi
Corp.,  Beringer Wine Estates,  Kendall-Jackson  and Allied Domecq Wines. In the
United Kingdom, Matthew Clark's principal competitors include Halewood Vintners,
H.P.  Bulmer,  Tavern,  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  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,  though  it may  from  time  to  time  supplement  its
inventories  through purchases from other distillers.  Following the acquisition
of the Black  Velvet  Assets,  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.
The Strathmore  brand of bottled water (which is available in still,  sparkling,
and  flavored  varieties)  is sourced  and  bottled in Forfar,  Scotland.  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 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
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 over 800 independent growers, principally
in the San Joaquin  Valley,  Central Coast and North Coast 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 7,000 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.

     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 and 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  2,520  full-time  employees  in the United
States at the end of April  2000,  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  1,720  full-time  employees  in the United
Kingdom at the end of April 2000,  of which  approximately  400 were  covered by
collective bargaining agreements.  Additional workers may be employed during the
peak season.

     The Company had approximately 260 full-time  employees in Canada at the end
of April 2000, of which approximately 200 were covered by collective  bargaining
agreements.

     The Company considers its employee relations generally to be good.


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

     The Company,  maintaining  its corporate  headquarters in offices leased in
Fairport, New York, 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 its  facilities are in
good  condition and working  order and have adequate  capacity to meet its needs
for the foreseeable future.

     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,  and six wineries in  California,  located in
Madera,  Gonzales,  Escalon,  Fresno and Ukiah.  All of the  facilities in which
these wineries  operate are owned,  except for the winery in Batavia,  New York,
which is 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.

     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  Assets,  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 also performs 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  the  National  Distribution  Centre,  located  in
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  12
distribution  centers located  throughout the United  Kingdom,  all of which are
leased.  These 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  and  vinify,  cellar  and bottle  wine.  The winery in  Monterey,
California crushes, vinifies and cellars wine.

     Franciscan  also owns and leases  approximately  2,000  plantable  acres of
vineyards in California and  approximately  800 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                49     Chairman of the Board, President and Chief
                                    Executive Officer
Robert Sands                 41     Group President
Peter Aikens                 61     President and Chief Executive Officer of
                                    Matthew Clark plc
Alexander L. Berk            50     President and Chief Executive Officer of
                                    Barton Incorporated
Agustin Francisco Huneeus    34     President of Franciscan Vineyards, Inc.
Jon Moramarco                43     President and Chief Executive Officer of
                                    Canandaigua Wine Company, Inc.
Thomas J. Mullin             48     Executive Vice President and General Counsel
George H. Murray             53     Executive Vice President and Chief Human
                                    Resources Officer
Thomas S. Summer             46     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  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 alcoholic beverage 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,  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 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.


                                     PART II

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

     On October  12,  1999,  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  "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.  With  respect  to all
periods for Fiscal 1999 and 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, 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 1999
  High            $  59 3/4        $  52 3/8       $  52 1/8         $  61 1/2
  Low             $  45 9/16       $  40 1/4       $  35 1/4         $  45 5/8
Fiscal 2000
  High            $  55 1/4        $  60 3/8       $  61 3/16        $  54 11/16
  Low             $  45 3/8        $  42 7/8       $  53             $  46 3/4


                                          CLASS B STOCK
                  --------------------------------------------------------------
                  1st Quarter      2nd Quarter      3rd Quarter      4th Quarter
                  -----------      -----------      -----------      -----------
Fiscal 1999
  High            $  59 3/4        $  51 1/2        $  52            $  62 1/4
  Low             $  45 1/2        $  40 3/4        $  37 1/4        $  46 7/8

Fiscal 2000
  High            $  55 3/4        $  60            $  60 3/4        $  58 1/8
  Low             $  47 1/2        $  44 1/4        $  56            $  49


     At May 15, 2000, the number of holders of record of Class A Stock and Class
B Stock of the Company were 940 and 273, 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  (pound)75  million 8 1/2% Series B Senior Notes due November
2009 and its  (pound)80  million 8 1/2% Series C Senior Notes due November  2009
restrict the payment of cash dividends.


ITEM 6.  SELECTED FINANCIAL DATA
-------  -----------------------
<TABLE>
<CAPTION>
                                                                                                     FOR THE SIX
                                            FOR THE                                                    MONTHS        FOR THE YEAR
                                           YEAR ENDED               FOR THE YEARS ENDED                ENDED            ENDED
                                          FEBRUARY 29,                 FEBRUARY 28,                 FEBRUARY 29,      AUGUST 31,
                                          ------------    --------------------------------------   --------------    ------------
                                              2000           1999          1998         1997            1996             1995
                                          ------------    -----------   -----------  -----------   --------------    ------------
(in thousands, except per share data)
<S>                                       <C>             <C>           <C>          <C>           <C>               <C>
Gross sales                               $  3,088,699    $ 1,984,801   $ 1,632,357  $ 1,534,452   $      738,415    $  1,185,074
Less-excise taxes                             (748,230)      (487,458)     (419,569)    (399,439)        (203,391)       (278,530)
                                          ------------    -----------   -----------  -----------   --------------    ------------
    Net sales                                2,340,469      1,497,343     1,212,788    1,135,013          535,024         906,544
Cost of product sold                        (1,618,009)    (1,049,309)     (869,038)    (812,812)        (389,281)       (657,883)
                                          ------------    -----------   -----------  -----------   --------------    ------------
    Gross profit                               722,460        448,034       343,750      322,201          145,743         248,661
Selling, general and
  administrative expenses                     (481,909)      (299,526)     (231,680)    (208,991)        (112,411)       (159,196)
Nonrecurring charges                            (5,510)        (2,616)         -            -              (2,404)         (2,238)
                                          ------------    -----------   -----------  -----------   --------------    ------------
    Operating income                           235,041        145,892       112,070      113,210           30,928          87,227
Interest expense, net                         (106,082)       (41,462)      (32,189)     (34,050)         (17,298)        (24,601)
                                          ------------    -----------   -----------  -----------   --------------    ------------
    Income before taxes and
      extraordinary item                       128,959        104,430        79,881       79,160           13,630          62,626
Provision for income taxes                     (51,584)       (42,521)      (32,751)     (32,977)          (6,221)        (24,008)
                                          ------------    -----------   -----------  -----------   --------------    ------------
    Income before extraordinary item            77,375         61,909        47,130       46,183            7,409          38,618
Extraordinary item, net of income taxes           -           (11,437)         -            -                -               -
                                          ------------    -----------   -----------  -----------   --------------    ------------
Net income                                $     77,375    $    50,472   $    47,130  $    46,183   $        7,409    $     38,618
                                          ============    ===========   ===========  ===========   ==============    ============

Earnings per common share:
  Basic:
    Income before extraordinary item      $       4.29    $      3.38   $      2.52  $      2.39   $         0.38    $       2.06
    Extraordinary item                            -             (0.62)         -            -                -               -
                                          ------------    -----------   -----------  -----------   --------------    ------------
    Earnings per common share - basic     $       4.29    $      2.76   $      2.52  $      2.39   $         0.38    $       2.06
                                          ============    ===========   ===========  ===========   ==============    ============
  Diluted:
    Income before extraordinary item      $       4.18    $      3.30   $      2.47  $      2.37   $         0.37    $       2.03
    Extraordinary item                            -             (0.61)         -            -                -               -
                                          ------------    -----------   -----------  -----------   --------------    ------------
    Earnings per common share - diluted   $       4.18    $      2.69   $      2.47  $      2.37   $         0.37    $       2.03
                                          ============    ===========   ===========  ===========   ==============    ============

Total assets                              $  2,348,791    $ 1,793,776   $ 1,090,555  $ 1,043,281   $    1,045,590    $    770,004
                                          ============    ===========   ===========  ===========   ==============    ============
Long-term debt                            $  1,237,135    $   831,689   $   309,218  $   338,884   $      327,616    $    198,859
                                          ============    ===========   ===========  ===========   ==============    ============
</TABLE>

For the fiscal  year ended  February  29,  2000,  and for the fiscal  year ended
February  28,  1999,  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 29, 2000,
under Item 8 of this Annual Report on Form 10-K.  During January 1996, the Board
of Directors of the Company changed the Company's fiscal year end from August 31
to the last day of February.


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

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

     The following  discussion and analysis  summarizes the significant  factors
affecting  (i)  consolidated  results of  operations of the Company for the year
ended February 29, 2000 ("Fiscal 2000"), compared to the year ended February 28,
1999 ("Fiscal  1999"),  and Fiscal 1999 compared to the year ended  February 28,
1998 ("Fiscal  1998"),  and (ii) financial  liquidity and capital  resources for
Fiscal 2000. This discussion and analysis should be read in conjunction with the
Company's consolidated financial statements and notes thereto included herein.

     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  popularly-priced 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).

     ACQUISITIONS IN FISCAL 2000 AND FISCAL 1999

     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").
Also on June 4, 1999, the Company purchased all of the outstanding capital stock
of Simi Winery, Inc. ("Simi").  (The acquisition of the capital stock of Simi is
hereafter referred to as the "Simi  Acquisition".) The Simi Acquisition included
the Simi winery, 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
operations of the Company since the date of  acquisition.  On February 29, 2000,
Simi was merged into Franciscan Estates.

     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.

     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 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%
                                  ------------  ------------
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  from the
acquisitions  of Matthew  Clark,  the Black Velvet  Assets and  Franciscan,  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  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 profit/(loss) (in thousands of
dollars) by operating segment of the Company for Fiscal 2000 and Fiscal 1999.

                                    Fiscal 2000 Compared to Fiscal 1999
                                   -------------------------------------
                                            Operating Profit/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 Profit      $  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.

     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 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.

FISCAL 1999 COMPARED TO FISCAL 1998

     NET SALES

     The  following  table sets forth the net sales (in thousands of dollars) by
operating segment of the Company for Fiscal 1999 and Fiscal 1998.

                                      Fiscal 1999 Compared to Fiscal 1998
                                    ---------------------------------------
                                                  Net Sales
                                    ---------------------------------------
                                                                 %Increase/
                                       1999           1998       (Decrease)
                                    -----------    -----------   ----------
Canandaigua Wine:
  Branded                           $   598,782    $   570,807        4.9 %
  Other                                  70,711         71,988       (1.8)%
                                    -----------    -----------
Canandaigua Wine net sales          $   669,493    $   642,795        4.2 %
                                    -----------    -----------
Barton:
  Beer                              $   478,611    $   376,607       27.1 %
  Spirits                               185,938        191,190       (2.7)%
                                    -----------    -----------
Barton net sales                    $   664,549    $   567,797       17.0 %
                                    -----------    -----------
Matthew Clark:
  Branded                           $    64,879    $      -           N/A
  Wholesale                              93,881           -           N/A
                                    -----------    -----------
Matthew Clark net sales             $   158,760    $      -           N/A
                                    -----------    -----------
Corporate Operations and Other      $     4,541    $     2,196      106.8 %
                                    -----------    -----------
Consolidated Net Sales              $ 1,497,343    $ 1,212,788       23.5 %
                                    ===========    ===========

     Net sales for Fiscal 1999  increased  to  $1,497.3  million  from  $1,212.8
million for Fiscal 1998, an increase of $284.6 million, or 23.5%.

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

     Net sales for Canandaigua  Wine for Fiscal 1999 increased to $669.5 million
from $642.8 million for Fiscal 1998, an increase of $26.7 million, or 4.2%. This
increase resulted primarily from (i) the introduction of two new products, Arbor
Mist and Mystic  Cliffs,  in Fiscal 1999,  (ii) Paul Masson  Grande Amber Brandy
growth,  and (iii) Almaden boxed wine growth.  These  increases  were  partially
offset by  declines  in other  wine  brands  and in the  Company's  grape  juice
concentrate business.

     Barton
     ------

     Net sales for Barton for  Fiscal  1999  increased  to $664.5  million  from
$567.8  million for Fiscal 1998, an increase of $96.8  million,  or 17.0%.  This
increase  resulted  primarily  from an  increase  in sales of beer brands led by
Barton's Mexican portfolio.  This increase was partially offset by a decrease in
revenues from Barton's spirits contract bottling business.

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

     Net sales for Matthew Clark for Fiscal 1999 since the date of  acquisition,
December 1, 1998, were $158.8 million.

     GROSS PROFIT

     The Company's gross profit increased to $448.0 million for Fiscal 1999 from
$343.8  million for Fiscal 1998, an increase of $104.3  million,  or 30.3%.  The
dollar increase in gross profit  resulted  primarily from the sales generated by
the Matthew Clark  Acquisition  completed in the fourth  quarter of Fiscal 1999,
increased beer sales and the  combination  of higher average  selling prices and
lower  average  costs for branded wine sales.  As a percent of net sales,  gross
profit  increased  to 29.9% for  Fiscal  1999 from 28.3% for  Fiscal  1998.  The
increase in the gross  profit  margin  resulted  primarily  from higher  selling
prices and lower costs for  Canandaigua  Wine's  branded  wine sales,  partially
offset by a sales mix shift towards lower margin  products,  particularly due to
the growth in Barton's beer sales.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     Selling,  general and  administrative  expenses increased to $299.5 million
for Fiscal  1999 from  $231.7  million  for Fiscal  1998,  an  increase of $67.8
million,  or 29.3%. The dollar increase in selling,  general and  administrative
expenses  resulted   primarily  from  expenses  related  to  the  Matthew  Clark
Acquisition,  as well as marketing and  promotional  costs  associated  with the
Company's  increased branded sales volume.  The  year-over-year  comparison also
benefited  from a one time charge for  separation  costs incurred in Fiscal 1998
related  to  an  organizational  change  within  Barton.  Selling,  general  and
administrative  expenses as a percent of net sales increased to 20.0% for Fiscal
1999 as compared to 19.1% for Fiscal 1998.  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 Matthew  Clark  Acquisition,  as
Matthew Clark's selling, general and administrative expenses as a percent of net
sales is typically higher than for the Company's other operating segments.

     NONRECURRING CHARGES

     The Company  incurred  nonrecurring  charges of $2.6 million in Fiscal 1999
related to the closure of a cider production  facility in the United Kingdom. No
such charges were incurred in Fiscal 1998.

     OPERATING INCOME

     The following table sets forth the operating profit/(loss) (in thousands of
dollars) by operating segment of the Company for Fiscal 1999 and Fiscal 1998.

                                     Fiscal 1999 Compared to Fiscal 1998
                                   ---------------------------------------
                                          Operating Profit/(Loss)
                                   ---------------------------------------
                                                                %Increase/
                                       1999          1998       (Decrease)
                                   -----------    -----------   ----------
Canandaigua Wine                   $    46,283    $    45,440        1.9 %
Barton                                 102,624         77,010       33.3 %
Matthew Clark                            8,998           -           N/A
Corporate Operations and Other         (12,013)       (10,380)     (15.7)%
                                   -----------    -----------
Consolidated Operating Profit      $   145,892    $   112,070       30.2 %
                                   ===========    ===========

     As a result of the above  factors,  operating  income  increased  to $145.9
million  for Fiscal 1999 from $112.1  million  for Fiscal  1998,  an increase of
$33.8 million, or 30.2%.

     INTEREST EXPENSE, NET

     Net interest expense  increased to $41.5 million for Fiscal 1999 from $32.2
million for Fiscal 1998,  an increase of $9.3  million,  or 28.8%.  The increase
resulted  primarily  from  additional   interest  expense  associated  with  the
borrowings related to the Matthew Clark Acquisition.

     EXTRAORDINARY ITEM, NET OF INCOME TAXES

     The Company incurred an  extraordinary  charge of $11.4 million after taxes
in Fiscal 1999. This charge resulted from fees related to the replacement of the
Company's senior credit facility,  including extinguishment of the Term Loan. No
extraordinary charges were incurred in Fiscal 1998.

     NET INCOME

     As a result of the above factors, net income increased to $50.5 million for
Fiscal 1999 from $47.1 million for Fiscal 1998, an increase of $3.3 million,  or
7.1%.

     For  financial  analysis  purposes  only,  the  Company's  earnings  before
interest,  taxes,  depreciation and amortization ("EBITDA") for Fiscal 1999 were
$184.5  million,  an increase of $39.3 million over EBITDA of $145.2 million for
Fiscal  1998.  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 2000 CASH FLOWS

     OPERATING ACTIVITIES

     Net cash  provided  by  operating  activities  for  Fiscal  2000 was $148.1
million,  which resulted from $139.9 million in net income  adjusted for noncash
items, plus $8.2 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 accrued  income taxes,  accrued  interest
expense and accrued salaries and  commissions,  partially offset by decreases in
accounts payable and accrued excise taxes.

     INVESTING ACTIVITIES AND FINANCING ACTIVITIES

     Net cash used in investing  activities for Fiscal 2000 was $495.7  million,
which  resulted  primarily  from  net  cash  paid  of  $452.9  million  for  the
acquisitions  of the Black Velvet  Assets and  Franciscan  and $57.7  million of
capital expenditures, including $8.9 million for vineyards.

     Net cash  provided  by  financing  activities  for  Fiscal  2000 was $355.6
million,  which  resulted  primarily  from  proceeds  of $1,486.2  million  from
issuance of long-term debt, including $400.0 million incurred in connection with
the  acquisitions  of the Black Velvet Assets and  Franciscan and $900.0 million
incurred to repay amounts  outstanding  under the senior credit  facility.  This
amount  was  partially  offset by  principal  payments  of  $1,060.2  million of
long-term debt and repayment of $60.4 million of net revolving loan borrowings.

     As of  February  29,  2000,  under the 2000  Credit  Agreement  (as defined
below),  the  Company had  outstanding  term loans of $570.1  million  bearing a
weighted  average  interest  rate of 7.95%,  $26.8  million of  revolving  loans
bearing a weighted average interest rate of 7.43%,  undrawn revolving letters of
credit of $10.7 million,  and $262.5 million in revolving  loans available to be
drawn.

     Total debt  outstanding  as of  February  29,  2000,  amounted  to $1,317.9
million,  an increase of $392.5  million from  February  28, 1999.  The ratio of
total debt to total  capitalization  increased to 71.7% as of February 29, 2000,
from 68.0% as of February 28, 1999.

     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 26, 2000, the Company had purchased  1,018,836 shares of Class
A Common Stock at an aggregate cost of $44.9  million,  or at an average cost of
$44.05 per share.

SENIOR CREDIT FACILITY

     During  June  1999,  the  Company  financed  the  purchase  price  for  the
Franciscan  Acquisition  primarily through additional term loan borrowings under
the senior credit facility. The Company financed the purchase price for the Simi
Acquisition with revolving loan borrowings under the senior credit facility.

     During  August  1999,  as  discussed  below,  a  portion  of the  Company's
borrowings under its 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 new senior
credit  facility  (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  approximately  $320.0  million) were fully drawn at
closing.  The  Tranche  I Term  Loan  facility  requires  quarterly  repayments,
starting at $12.0 million in March 2000 and increasing  thereafter annually with
final  payments of $23.0  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 approximately  $118.3 million).  After this repayment,  the required
quarterly  repayments  of the  Tranche  II Term Loan  facility  were  revised to
(pound)0.6  million ($1.0 million) for each quarter in 2000,  (pound)1.2 million
($1.9  million)  for each  quarter in 2001 and 2002,  (pound)1.5  million  ($2.4
million) for each quarter in 2003, and  (pound)25.6  million ($40.4 million) for
each quarter in 2004 (the foregoing U.S.  dollar  equivalents are as of February
29, 2000).  On May 15, 2000, the Company issued  (pound)80.0  million  aggregate
principal  amount of 8 1/2% Series C Senior Notes.  The proceeds of the offering
were used to repay a portion  of the  Tranche II Term  Loan.  See  Senior  Notes
below. 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
baskets,  exceptions  and  thresholds  which are generally more favorable to the
Company than those contained in its prior senior credit facility.

     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 29,  2000,  the margin
was 1.25% for  Revolving  Credit loans and 1.75% 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  29, 2000.  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 baskets,  exceptions
and  thresholds  which are  generally  more  favorable to the Company than those
contained in its prior senior credit facility.  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 senior debt  coverage
ratio.

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  "Senior  Notes").  The net
proceeds of the offering  (approximately  $196.0  million)  were used to repay a
portion of the Company's  borrowings under its senior credit facility.  Interest
on the Senior Notes is payable  semiannually  on February 1 and August 1 of each
year,  beginning February 1, 2000. The Senior Notes are redeemable at the option
of the Company, in whole or in part, at any time. The 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 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 (approximately
$121.7  million  upon  issuance  and $118.4  million as of  February  29,  2000)
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  approximately  $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 the
Sterling  Senior  Notes.  The terms of the  Sterling  Series B Senior  Notes are
identical in all material respects to the Sterling Senior Notes.

     On May 15, 2000,  the Company  issued  (pound)80.0  million  (approximately
$120.4 million)  aggregate  principal amount of 8 1/2% Series C Senior Notes due
November 2009 at an issuance price of (pound)79.6 million  (approximately $119.8
million,  net of $0.6 million  unamortized  discount,  with an effective rate of
8.6%) (the "Sterling  Series C Senior Notes").  The net proceeds of the offering
((pound)78.8  million,  or  approximately  $118.6  million) were used to repay a
portion of the Company's  British  pound  sterling  borrowings  under its senior
credit facility.  After this repayment, the required quarterly repayments of the
Tranche II Term Loan facility were revised to (pound)0.2  million ($0.3 million)
for the remaining three quarters in 2000,  (pound)0.4 million ($0.6 million) for
each  quarter  in 2001 and 2002,  (pound)0.5  million  ($0.8  million)  for each
quarter in 2003,  and  (pound)8.5  million  ($12.8  million) for each quarter in
2004. (The foregoing U.S.  dollar  equivalents are as of May 15, 2000.) 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.

SENIOR SUBORDINATED NOTES

     As of  February  29,  2000,  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.  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  (approximately  $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.

CAPITAL EXPENDITURES

     During  Fiscal  2000,  the  Company  incurred  $57.7  million  for  capital
expenditures,  including $8.9 million related to vineyards. The Company plans to
spend  approximately  $65.0  million  for  capital  expenditures,  exclusive  of
vineyards,  in fiscal 2001. 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 29, 2000,  aggregate  approximately $28.4 million for
contracts expiring through December 2005.

     At February 29, 2000,  the Company had open currency  forward  contracts to
purchase  various foreign  currencies of $6.8 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.  The Company has been
able,  subject to normal  competitive  conditions,  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. The Company  believes the effect of the adoption on its
financial  statements  will not be material based on the Company's  current risk
management strategies.

YEAR 2000 ISSUE

     Prior to January 1, 2000, the Company put into place  detailed  programs to
address Year 2000  readiness in its internal  systems and with its key customers
and  suppliers.  These  programs  included  contingency  plans  to  protect  the
Company's  business and  operations  from Year 2000 related  interruptions.  The
costs incurred  related to its Year 2000  activities and its readiness  programs
were not material to the Company.

     The  Company  did not  experience  any  interruptions  in its  business  or
operations when the date changed from 1999 to 2000.  Based upon operations since
January 1, 2000,  the  Company  does not  expect any  significant  impact on its
on-going business as a result of the Year 2000 issue.

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 approximately  $1,255.4
million at  February  29,  2000.  A  hypothetical  1% increase  from  prevailing
interest rates at February 29, 2000, would result in a decrease in fair value of
long-term debt by approximately $33.3 million.

     Also, a hypothetical 1% increase from prevailing interest rates at February
29, 2000, would result in an approximate  increase in cash required for interest
on variable interest rate debt during the next five fiscal years as follows:

                            2001     $ 5.4 million
                            2002     $ 4.8 million
                            2003     $ 4.0 million
                            2004     $ 3.0 million
                            2005     $ 1.3 million

     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 29, 2000, 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 29, 2000,  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 29, 2000,  the potential  loss on  outstanding  foreign
exchange  hedging  agreements from a hypothetical  10% adverse change in foreign
currency exchange rates would not be material.

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


                    CANANDAIGUA BRANDS, INC. AND SUBSIDIARIES
                    -----------------------------------------

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

                               FEBRUARY 29, 2000
                               -----------------

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

   Report of Independent Public Accountants................................  29
   Consolidated Balance Sheets - February 29, 2000, and February 28, 1999..  30
   Consolidated Statements of Income for the years ended February 29, 2000,
      February 28, 1999, and February 28, 1998.............................  31
   Consolidated Statements of Changes in Stockholders' Equity for the years
      ended February 29, 2000, February 28, 1999, and February 28, 1998....  32
   Consolidated Statements of Cash Flows for the years ended
      February 29, 2000, February 28, 1999, and February 28, 1998..........  33
   Notes to Consolidated Financial Statements..............................  34
   Selected Quarterly Financial Information (unaudited)....................  53

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.


                                                           [LOGO]
                                                                 ARTHUR ANDERSEN



REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Canandaigua Brands, Inc.:

We have audited the  accompanying  consolidated  balance  sheets of  Canandaigua
Brands,  Inc. (a Delaware  corporation) and subsidiaries as of February 29, 2000
and  February  28,  1999,  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  29,  2000.  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 Canandaigua  Brands,  Inc. and
subsidiaries  as of February 29, 2000 and February 28, 1999,  and the results of
their  operations and their cash flows for each of the three years in the period
ended  February 29, 2000 in  conformity  with  accounting  principles  generally
accepted in the United States.

                                                /s/ Arthur Andersen LLP

Rochester, New York
May 15, 2000



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

                                                February 29,      February 28,
                                                    2000              1999
                                                ------------      ------------

                   ASSETS
                   ------
CURRENT ASSETS:
  Cash and cash investments                     $     34,308      $     27,645
  Accounts receivable, net                           291,108           260,433
  Inventories, net                                   615,700           508,571
  Prepaid expenses and other current assets           54,881            59,090
                                                ------------      ------------
    Total current assets                             995,997           855,739
PROPERTY, PLANT AND EQUIPMENT, net                   542,971           428,803
OTHER ASSETS                                         809,823           509,234
                                                ------------      ------------
  Total assets                                  $  2,348,791      $  1,793,776
                                                ============      ============

      LIABILITIES AND STOCKHOLDERS' EQUITY
      ------------------------------------
CURRENT LIABILITIES:
  Notes payable                                 $     26,800      $     87,728
  Current maturities of long-term debt                53,987             6,005
  Accounts payable                                   122,213           122,746
  Accrued excise taxes                                30,446            49,342
  Other accrued expenses and liabilities             204,771           149,451
                                                ------------      ------------
    Total current liabilities                        438,217           415,272
                                                ------------      ------------
LONG-TERM DEBT, less current maturities            1,237,135           831,689
                                                ------------      ------------
DEFERRED INCOME TAXES                                116,447            88,179
                                                ------------      ------------
OTHER LIABILITIES                                     36,152            23,364
                                                ------------      ------------
COMMITMENTS AND CONTINGENCIES (See Note 12)

STOCKHOLDERS' EQUITY:
  Preferred Stock, $.01 par value-
    Authorized, 1,000,000 shares;
    Issued, none at February 29, 2000, and
    February 28, 1999                                   -                 -
  Class A Common Stock, $.01 par value-
    Authorized, 120,000,000 shares;
    Issued, 18,206,662 shares at
    February 29, 2000, and 17,915,359 shares
    at February 28, 1999                                 182               179
  Class B Convertible Common Stock,
    $.01 par value-
    Authorized, 20,000,000 shares;
    Issued, 3,745,560 shares at
    February 29, 2000, and 3,849,173 shares
    at February 28, 1999                                  38                39
  Additional paid-in capital                         247,949           239,912
  Retained earnings                                  358,456           281,081
  Accumulated other comprehensive income-
    Cumulative translation adjustment                 (4,149)           (4,173)
                                                ------------      ------------
                                                     602,476           517,038
                                                ------------      ------------
  Less-Treasury stock-
  Class A Common Stock, 3,137,244 at
    February 29, 2000, and 3,168,306 shares
    at February 28, 1999, at cost                    (79,429)          (79,559)
  Class B Convertible Common Stock, 625,725
    shares at February 29, 2000, and
    February 28, 1999, at cost                        (2,207)           (2,207)
                                                ------------      ------------
                                                     (81,636)          (81,766)
                                                ------------      ------------
    Total stockholders' equity                       520,840           435,272
                                                ------------      ------------
  Total liabilities and stockholders' equity    $  2,348,791      $  1,793,776
                                                ============      ============


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

<TABLE>
                                    CANANDAIGUA BRANDS, INC. AND SUBSIDIARIES
                                        CONSOLIDATED STATEMENTS OF INCOME
                                      (in thousands, except per share data)
<CAPTION>
                                                     For the Year
                                                  Ended February 29,    For the Years Ended February 28,
                                                  ------------------    --------------------------------
                                                         2000                1999              1998
                                                  ------------------    --------------    --------------

<S>                                               <C>                   <C>               <C>
GROSS SALES                                       $        3,088,699    $    1,984,801    $    1,632,357
  Less - Excise taxes                                       (748,230)         (487,458)         (419,569)
                                                  ------------------    --------------    --------------
    Net sales                                              2,340,469         1,497,343         1,212,788
COST OF PRODUCT SOLD                                      (1,618,009)       (1,049,309)         (869,038)
                                                  ------------------    --------------    --------------
    Gross profit                                             722,460           448,034           343,750
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES                (481,909)         (299,526)         (231,680)
NONRECURRING CHARGES                                          (5,510)           (2,616)             -
                                                  ------------------    --------------    --------------
    Operating income                                         235,041           145,892           112,070
INTEREST EXPENSE, net                                       (106,082)          (41,462)          (32,189)
                                                  ------------------    --------------    --------------
    Income before taxes and extraordinary item               128,959           104,430            79,881
PROVISION FOR INCOME TAXES                                   (51,584)          (42,521)          (32,751)
                                                  ------------------    --------------    --------------
    Income before extraordinary item                          77,375            61,909            47,130
EXTRAORDINARY ITEM, NET OF INCOME TAXES                         -              (11,437)             -
                                                  ------------------    --------------    --------------
NET INCOME                                        $           77,375    $       50,472    $       47,130
                                                  ==================    ==============    ==============


SHARE DATA:
Earnings per common share:
  Basic:
  Income before extraordinary item                $             4.29    $         3.38    $         2.52
  Extraordinary item                                            -                (0.62)             -
                                                  ------------------    --------------    --------------
  Earnings per common share - basic               $             4.29    $         2.76    $         2.52
                                                  ==================    ==============    ==============

  Diluted:
  Income before extraordinary item                $             4.18    $         3.30    $         2.47
  Extraordinary item                                            -                (0.61)             -
                                                  ------------------    --------------    --------------
  Earnings per common share - diluted             $             4.18    $         2.69    $         2.47
                                                  ==================    ==============    ==============

Weighted average common shares outstanding:
  Basic                                                       18,054            18,293            18,672
  Diluted                                                     18,499            18,754            19,105

<FN>
  The accompanying notes to consolidated financial statements are an integral part of these statements.
</FN>
</TABLE>


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

<CAPTION>
                                                                                    Accumulated
                                       Common Stock      Additional                   Other
                                     -----------------    Paid-in      Retained   Comprehensive   Treasury   Restricted
                                     Class A   Class B    Capital      Earnings      Income        Stock       Stock       Total
                                     -------   -------   ----------   ----------  -------------   --------   ----------  ---------
<S>                                  <C>       <C>       <C>          <C>         <C>             <C>        <C>         <C>
BALANCE, February 28, 1997           $   174   $    40   $  222,336   $  183,479  $        -      $(28,092)  $     -     $ 377,937
Net income and comprehensive
  income for fiscal 1998                -         -            -          47,130           -          -            -        47,130
Exercise of 117,452 Class A
  stock options                            2      -           1,799         -              -          -            -         1,801
Employee stock purchases of
  78,248 treasury shares                -         -           1,016         -              -           240         -         1,256
Repurchase of 362,100 Class A
  Common shares                         -         -            -            -              -        (9,233)        -        (9,233)
Acceleration of 142,437 Class A
  stock options                         -         -           3,625         -              -          -            -         3,625
Issuance of 25,000 restricted
  Class A Common shares                 -         -           1,144         -              -          -          (1,144)      -
Amortization of unearned restricted
  stock compensation                    -         -            -            -              -          -             267        267
Accelerated amortization of unearned
  restricted stock compensation         -         -             200         -              -          -             877      1,077
Tax benefit on Class A stock
  options exercised                     -         -           1,382         -              -          -            -         1,382
Tax benefit on disposition of
  employee stock purchases              -         -             185         -              -          -            -           185
                                     -------   -------   ----------   ----------   ------------   --------   ----------  ---------

BALANCE, February 28, 1998               176        40      231,687      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 107,010 Class B
  Convertible Common shares to
  Class A Common shares                    1        (1)        -            -              -          -            -          -
Exercise of 203,565 Class A
  stock options                            2      -           4,085         -              -          -            -         4,087
Employee stock purchases of
  49,850 treasury shares                -         -           1,643         -              -           197         -         1,840
Repurchase of 1,018,836 Class A
  Common shares                         -         -            -            -              -       (44,878)        -       (44,878)
Acceleration of 1,250 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               179        39      239,912      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 103,613 Class B
  Convertible Common shares to
  Class A Common shares                    1        (1)        -            -              -          -            -          -
Exercise of 187,690 Class A
  stock options                            2      -           3,361         -              -          -            -         3,363
Employee stock purchases of 31,062
  treasury shares                       -         -           1,298         -              -           130         -         1,428
Acceleration of 94,725 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           $   182   $    38   $  247,949   $  358,456   $     (4,149)  $(81,636)  $     -     $ 520,840
                                     =======   =======   ==========   ==========   ============   ========   ==========  =========
<FN>
              The accompanying notes to consolidated financial statements are an integral part of these statements.
</FN>
</TABLE>


<TABLE>
                                     CANANDAIGUA BRANDS, INC. AND SUBSIDIARIES
                                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                  (in thousands)
<CAPTION>
                                                                      For the Year
                                                                   Ended February 29,  For the Years Ended February 28,
                                                                   ------------------  --------------------------------
                                                                          2000              1999              1998
                                                                   ------------------  --------------    --------------
<S>                                                                <C>                 <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                                       $           77,375  $       50,472    $       47,130

  Adjustments to reconcile net income to net cash
    provided by operating activities:
      Depreciation of property, plant and equipment                            40,892          27,282            23,847
      Extraordinary item, net of income taxes                                    -             11,437              -
      Amortization of intangible assets                                        23,831          11,308             9,314
      Stock-based compensation expense                                            856             144             1,747
      Amortization of discount on long-term debt                                  427             388               352
      (Gain) loss on sale of assets                                            (2,003)          1,193            (3,001)
      Deferred tax (benefit) provision                                         (1,500)         10,053             4,275
      Change in operating assets and liabilities,
        net of effects from purchases of businesses:
          Accounts receivable, net                                            (10,812)         44,081               749
          Inventories, net                                                      1,926           1,190           (60,659)
          Prepaid expenses and other current assets                             4,663         (14,115)           (4,354)
          Accounts payable                                                    (17,070)        (17,560)           (3,288)
          Accrued excise taxes                                                (18,719)         17,124               440
          Other accrued expenses and liabilities                               44,184         (31,807)           14,655
          Other assets and liabilities, net                                     4,005          (3,945)           (2,452)
                                                                   ------------------  --------------    --------------
            Total adjustments                                                  70,680          56,773           (18,375)
                                                                   ------------------  --------------    --------------
            Net cash provided by operating activities                         148,055         107,245            28,755
                                                                   ------------------  --------------    --------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of businesses, net of cash acquired                              (452,910)       (332,216)             -
  Purchases of property, plant and equipment                                  (57,747)        (49,857)          (31,203)
  Proceeds from sale of assets                                                 14,977             431            12,552
  Purchase of joint venture minority interest                                    -               (716)             -
                                                                   ------------------  --------------    --------------
            Net cash used in investing activities                            (495,680)       (382,358)          (18,651)
                                                                   ------------------  --------------    --------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of long-term debt                                  1,486,240         635,090           140,000
  Exercise of employee stock options                                            3,358           4,083             1,776
  Proceeds from employee stock purchases                                        1,428           1,840             1,256
  Principal payments of long-term debt                                     (1,060,229)       (264,101)         (186,367)
  Net (repayment of) proceeds from notes payable                              (60,352)        (13,907)           34,900
  Payment of issuance costs of long-term debt                                 (14,888)        (17,109)           (1,214)
  Purchases of treasury stock                                                    -            (44,878)           (9,233)
                                                                   ------------------  --------------    --------------
            Net cash provided by (used in) financing activities               355,557         301,018           (18,882)
                                                                   ------------------  --------------    --------------

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

NET INCREASE (DECREASE) IN CASH AND CASH INVESTMENTS                            6,663          26,413            (8,778)
CASH AND CASH INVESTMENTS, beginning of year                                   27,645           1,232            10,010
                                                                   ------------------  --------------    --------------
CASH AND CASH INVESTMENTS, end of year                             $           34,308  $       27,645    $        1,232
                                                                   ==================  ==============    ==============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
  Cash paid during the year for:
    Interest                                                       $           95,004  $       35,869    $       33,394
                                                                   ==================  ==============    ==============
    Income taxes                                                   $           35,478  $       40,714    $       32,164
                                                                   ==================  ==============    ==============

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



                    CANANDAIGUA BRANDS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                FEBRUARY 29, 2000

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

DESCRIPTION OF BUSINESS -
Canandaigua  Brands, Inc. and its subsidiaries (the "Company") operate primarily
in the beverage alcohol industry. The Company is a leading producer and marketer
of branded beverage alcohol products in North America and the United Kingdom. It
maintains a portfolio of over 185 premier branded  products in North America and
the United  Kingdom.  The Company's  products are distributed by more than 1,000
wholesalers in North America. In the United Kingdom, the Company distributes its
own  brands  of cider,  wine and  bottled  water  and is a  leading  independent
beverage supplier to the on-premise trade, distributing its own branded products
and those of other companies to more than 16,000  on-premise  establishments  in
the U.K.

PRINCIPLES  OF  CONSOLIDATION  -
The  consolidated  financial  statements of the Company  include the accounts of
Canandaigua 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.  The amounts at February 29, 2000,  and February 28,
1999, are 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:

     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 29, 2000, and February 28, 1999, the Company
had letters of credit  outstanding  totaling  $10.8  million  and $4.0  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 29, 2000                            February 28, 1999
                                    -----------------------------------------    --------------------------------------
                                     Notional       Carrying         Fair         Notional      Carrying        Fair
                                      Amount         Amount          Value         Amount        Amount         Value
                                    ----------     -----------    -----------    ----------    ----------    ----------
(in thousands)
<S>                                 <C>            <C>            <C>            <C>           <C>           <C>
Liabilities:
------------
Notes payable                       $     -        $    26,800    $    26,800    $     -       $   87,728    $   87,728
Long-term debt, including
  current portion                   $     -        $ 1,291,122    $ 1,255,424    $     -       $  837,694    $  844,568

Derivative Instruments:
-----------------------
Foreign exchange hedging
  agreements:
    Currency forward contracts      $    6,895     $      -       $      (125)   $   12,444    $     -       $   (1,732)
</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 29,  2000,  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 29, 2000      February 28, 1999
                                    -----------------      -----------------
     (in thousands)
     Raw materials and supplies     $          29,417      $          32,388
     In-process inventories                   419,558                344,175
     Finished case goods                      166,725                132,008
                                    -----------------      -----------------
                                    $         615,700      $         508,571
                                    =================      =================

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,  cash
surrender  value of officers' life  insurance 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 29, 2000, the weighted average remaining useful life of these assets
is 36.4 years.  At February 29, 2000,  there were no  officers'  life  insurance
policies  with face  values.  The face  value of the  officers'  life  insurance
policies totaled $2.9 million at February 28, 1999.

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
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 2000.

ADVERTISING AND PROMOTION COSTS -
The Company  generally  expenses  advertising  and promotion  costs as incurred,
shown or  distributed.  Prepaid  advertising  costs at February  29,  2000,  and
February 28, 1999, were not material.  Advertising and promotion expense for the
years ended February 29, 2000,  February 28, 1999,  and February 28, 1998,  were
$279.6 million, $173.1 million, and $111.7 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 29, 2000, and
February 28, 1999.

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.

OTHER -
Certain fiscal 1999 balances have been  reclassified  to conform to current year
presentation.

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, founded in 1810,
is a leading  U.K.-based  producer and  distributor  of its own brands of cider,
wine and bottled water and a leading independent drinks wholesaler in the U.K.

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,  based upon a final
appraisal,  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.

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 $185.5 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),  $35.5 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,  $96.5
million and $8.3 million,  respectively,  is being  amortized on a straight-line
basis over 40 years.  The  Franciscan  Estates 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.

The following  table sets forth unaudited pro forma results of operations of the
Company for the fiscal years ended February 29, 2000, and February 28, 1999. The
unaudited  pro forma results of operations  give effect to the  acquisitions  of
Matthew  Clark,  the Black Velvet  Assets and  Franciscan as if they occurred on
March 1, 1998. 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.
During fiscal 2000 and fiscal 1999,  the Company  incurred and paid $2.9 million
and $2.6 million,  respectively,  in nonrecurring charges related to the closing
of a  Matthew  Clark  cider  production  facility.  The  charges  were part of a
production  facility  consolidation  program that was begun prior to the Matthew
Clark Acquisition. The unaudited pro forma results of operations for fiscal 1999
(shown in the table below) reflect total  nonrecurring  charges of $21.5 million
($0.69  per share on a diluted  basis)  related to this  facility  consolidation
program,  of which $18.9  million was  incurred  prior to the  acquisition.  The
unaudited pro forma  results of  operations  for fiscal 2000 (shown in the table
below),  reflect total nonrecurring charges of $12.4 million ($0.40 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 29,       February 28,
                                                     2000               1999
                                                 -----------        -----------
(in thousands, except per share data)
Net sales                                        $ 2,367,833        $ 2,154,992
Income before extraordinary item                 $    68,277        $    45,793
Extraordinary item, net of income taxes          $      -           $   (11,437)
Net income                                       $    68,277        $    34,356

Earnings per common share:
  Basic:
  Income before extraordinary item               $      3.78        $      2.50
  Extraordinary item                                    -                 (0.62)
                                                 -----------        -----------
  Earnings per common share - basic              $      3.78        $      1.88
                                                 ===========        ===========

  Diluted:
  Income before extraordinary item               $      3.69        $      2.44
  Extraordinary item                                    -                 (0.61)
                                                  ----------        -----------
  Earnings per common share - diluted            $      3.69        $      1.83
                                                  ==========        ===========

Weighted average common shares outstanding:
  Basic                                               18,054             18,293
  Diluted                                             18,499             18,754





3.  PROPERTY, PLANT AND EQUIPMENT:

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

                                      February 29, 2000       February 28, 1999
                                      -----------------       -----------------
(in thousands)
Land                                  $          62,871       $          25,434
Vineyards                                        37,756                     266
Buildings and improvements                      131,588                 104,152
Machinery and equipment                         440,008                 380,069
Motor vehicles                                    7,241                  20,191
Construction in progress                         27,874                  35,468
                                      -----------------       -----------------
                                                707,338                 565,580
Less - Accumulated depreciation                (164,367)               (136,777)
                                      -----------------       -----------------
                                      $         542,971       $         428,803
                                      =================       =================

4.  OTHER ASSETS:

The major components of other assets are as follows:

                                          February 29,         February 28,
                                              2000                 1999
                                          -----------          -----------
(in thousands)
Goodwill                                  $   463,577          $   311,908
Trademarks                                    253,148              102,183
Distribution rights and agency
  license agreements                           87,052               76,894
Other                                          64,504               53,779
                                          -----------          -----------
                                              868,281              544,764
Less - Accumulated amortization               (58,458)             (35,530)
                                          -----------          -----------
                                          $   809,823          $   509,234
                                          ===========          ===========

5.  OTHER ACCRUED EXPENSES AND LIABILITIES:

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

                                         February 29,       February 28,
                                             2000               1999
                                         -----------        -----------
(in thousands)
Accrued advertising and promotions       $    37,083        $    38,604
Accrued interest                              24,757             11,384
Accrued income taxes payable                  24,093              9,347
Accrued salaries and commissions              23,850             15,584
Other                                         94,988             74,532
                                         -----------        -----------
                                         $   204,771        $   149,451
                                         ===========        ===========


6.  BORROWINGS :

Borrowings consist of the following:
<TABLE>
<CAPTION>
                                                                                        February 28,
                                                       February 29, 2000                   1999
                                           -----------------------------------------    -----------
                                             Current       Long-term        Total          Total
(in thousands)                             -----------    -----------    -----------    -----------
<S>                                        <C>            <C>            <C>            <C>
Notes Payable:
--------------
  Senior Credit Facility:
    Revolving Credit Loans                 $    26,800    $      -       $    26,800    $    83,075
  Other                                           -              -              -             4,653
                                           -----------    -----------    -----------    -----------
                                           $    26,800    $      -       $    26,800    $    87,728
                                           ===========    ===========    ===========    ===========

Long-term Debt:
---------------
  Senior Credit Facility - Term Loans      $    51,801    $   518,249    $   570,050    $   625,630
  Senior Notes                                    -           318,433        318,433           -
  Senior Subordinated Notes                       -           392,947        392,947        192,520
  Other Long-term Debt                           2,186          7,506          9,692         19,544
                                           -----------    -----------    -----------    -----------
                                           $    53,987    $ 1,237,135    $ 1,291,122    $   837,694
                                           ===========    ===========    ===========    ===========
</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 new senior credit  facility
(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  approximately  $320.0  million) were fully drawn at
closing.  The  Tranche  I Term  Loan  facility  requires  quarterly  repayments,
starting at $12.0 million in March 2000 and increasing  thereafter annually with
final  payments of $23.0  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 approximately  $118.3 million).  After this repayment,  the required
quarterly  repayments  of the  Tranche  II Term Loan  facility  were  revised to
(pound)0.6  million ($1.0 million) for each quarter in 2000,  (pound)1.2 million
($1.9  million)  for each  quarter in 2001 and 2002,  (pound)1.5  million  ($2.4
million) for each quarter in 2003, and  (pound)25.6  million ($40.4 million) for
each quarter in 2004 (the foregoing U.S.  dollar  equivalents are as of February
29, 2000).  On May 15, 2000, the Company issued  (pound)80.0  million  aggregate
principal  amount of 8 1/2% Series C Senior Notes.  The proceeds of the offering
were  used to  repay a  portion  of the  Tranche  II Term  Loan  (see  Note 19 -
Subsequent Event). 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 baskets, exceptions and thresholds which are generally more favorable
to the Company than those contained in its prior senior credit facility.

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 29,  2000,  the margin
was 1.25% for  Revolving  Credit loans and 1.75% 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  29, 2000.  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 baskets,  exceptions
and  thresholds  which are  generally  more  favorable to the Company than those
contained in its prior senior credit facility.  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 senior debt  coverage
ratio.

As of  February  29,  2000,  under the 2000  Credit  Agreement,  the Company had
outstanding  term loans of $570.1 million  bearing a weighted  average  interest
rate of 7.95% and $26.8 million of revolving  loans  bearing a weighted  average
interest rate of 7.43%.  The Company had average  outstanding  Revolving  Credit
Loans of approximately $73.0 million,  $75.5 million,  and $59.9 million for the
years ended  February  29,  2000,  February  28,  1999,  and  February 28, 1998,
respectively.  Amounts  available  to be drawn down under the  Revolving  Credit
Loans were $262.5  million and $212.9 million at February 29, 2000, and February
28, 1999, respectively.  The average interest rate on the Revolving Credit Loans
was 7.31%,  6.23%,  and 6.57% for fiscal  2000,  fiscal  1999,  and fiscal 1998,
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 ("Senior Notes"). The net proceeds of the
offering  (approximately  $196.0  million)  were used to repay a portion  of the
Company's  borrowings under its senior credit  facility.  Interest on the Senior
Notes is payable semiannually on February 1 and August 1 of each year, beginning
February 1, 2000.  The Senior Notes are redeemable at the option of the Company,
in whole or in  part,  at any  time.  The  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 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  (approximately
$121.7  million  upon  issuance  and $118.4  million as of  February  29,  2000)
aggregate  principal  amount of 8 1/2% Senior Notes due November 2009 ("Sterling
Senior  Notes").  The net  proceeds of the  offering  ((pound)73.0  million,  or
approximately  $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 the
Sterling  Senior  Notes.  The terms of the  Sterling  Series B Senior  Notes are
identical in all material respects to the Sterling Senior Notes.

SENIOR SUBORDINATED NOTES -
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  (approximately  $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.

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  all  of the  Company's  significant  operating
subsidiaries (other than Matthew Clark and its subsidiaries).

On October 29, 1996, the Company issued $65.0 million aggregate principal amount
of 8 3/4% Series B Senior Subordinated Notes ($62.9 million, net of $2.1 million
unamortized  discount,  with an effective rate of 9.76% as of February 29, 2000)
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.

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)
               2001              $    53,987
               2002                   83,575
               2003                   88,469
               2004                  294,753
               2005                  253,705
               Thereafter            518,686
                                 -----------
                                 $ 1,293,175
                                 ===========

7.  INCOME TAXES:

The provision for (benefit from) income taxes consists of the following:

                                                             For the Years Ended
                                                                 February 28,
                                                             -------------------
                    For the Year Ended February 29, 2000       1999       1998
                 -----------------------------------------   --------   --------
                            State and
                  Federal     Local     Foreign     Total      Total      Total
                 --------   --------   --------   --------   --------   --------
(in thousands)
Current          $ 38,588   $  6,091   $  8,405   $ 53,084   $ 32,468   $ 28,476
Deferred          (10,804)     2,874      6,430     (1,500)    10,053      4,275
                 --------   --------   --------   --------   --------   --------
                 $ 27,784   $  8,965   $ 14,835   $ 51,584   $ 42,521   $ 32,751
                 ========   ========   ========   ========   ========   ========

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.

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 Year Ended
                                              February 29,              For the Years Ended February 28,
                                          --------------------    --------------------------------------------
                                                  2000                    1999                    1998
                                          --------------------    --------------------    --------------------
                                                        % 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    $ 45,136        35.0    $ 36,551        35.0    $ 27,958        35.0
State and local income taxes, net of
  Federal income tax benefit                 3,077         2.4       6,977         6.7       4,793         6.0
Earnings of subsidiaries taxed at
  other than U.S. statutory rate             1,294         1.0         227         0.2        -           -
Miscellaneous items, net                     2,077         1.6      (1,234)       (1.2)       -           -
                                          --------    --------    --------    --------    --------    --------
                                          $ 51,584        40.0    $ 42,521        40.7    $ 32,751        41.0
                                          ========    ========    ========    ========    ========    ========
</TABLE>

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 29,      February 28,
                                                 2000             1999
                                             -----------       -----------
(in thousands)
Depreciation and amortization                $   127,436       $    89,447
Effect of change in accounting method             11,200            16,546
Inventory reserves                                 4,542             6,975
Restructuring                                     (6,824)           (3,244)
Insurance accruals                                (3,868)           (3,112)
Other accruals                                   (11,136)           (8,653)
                                             -----------       -----------
                                             $   121,350       $    97,959
                                             ===========       ===========

At  February  29,  2000,  the  Company  has  U.S.  Federal  net  operating  loss
carryforwards  of $1.8 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 Canandaigua  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 $7.3
million,  $6.8 million,  and $5.9 million for the years ended February 29, 2000,
February 28, 1999, and February 28, 1998, respectively.

On December 31, 1999, the Company's subsidiary,  Matthew Clark, and the Trustees
of the Matthew Clark Group Pension Plan and the Matthew Clark Executive  Pension
Plan (the "Plans") entered into an agreement to merge the Plans into the Matthew
Clark Group Pension Plan  effective  December 31, 1999.  The Matthew Clark Group
Pension  Plan is a defined  benefit  plan  with  assets  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 pension plans, which cover certain Canadian employees.

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 28,
                                                                        February 29, 2000                    1999
                                                         ---------------------------------------------    -----------
                                                         Matthew Clark        Barton          Total          Total
                                                         -------------     ------------    -----------    -----------
(in thousands)
<S>                                                      <C>               <C>             <C>            <C>
Change in benefit obligation:
Benefit obligation at March 1                            $     163,680     $       -       $   163,680    $      -
Acquisition                                                       -              15,348         15,348        165,997
Service cost                                                     4,299              336          4,635          1,335
Interest cost                                                   10,494              711         11,205          2,671
Plan participants' contribution                                  1,507             -             1,507            481
Actuarial loss/(gain)                                           12,350           (2,222)        10,128           -
Benefits paid                                                   (4,939)            (405)        (5,344)        (1,517)
Foreign currency exchange rate changes                          (2,875)             513         (2,362)        (5,287)
                                                         -------------     ------------    -----------    -----------
Benefit obligation at last day of February               $     184,516     $     14,281    $   198,797    $   163,680
                                                         =============     ============    ===========    ===========

Change in plan assets:
Fair value of plan assets at March 1                     $     194,606     $       -       $   194,606    $      -
Acquisition                                                       -              12,318         12,318        194,001
Actual return on plan assets                                    20,903              948         21,851          7,935
Plan participants' contributions                                 1,507             -             1,507            481
Employer contribution                                             -                 670            670           -
Benefits paid                                                   (4,939)            (431)        (5,370)        (1,517)
Foreign currency exchange rate changes                          (3,198)             445         (2,753)        (6,294)
                                                         -------------     ------------    -----------    -----------
Fair value of plan assets at last day of February        $     208,879     $     13,950    $   222,829    $   194,606
                                                         =============     ============    ===========    ===========

Funded status of the plan as of last day of February:
Funded status                                            $      24,362     $       (330)   $    24,032    $    30,927
Unrecognized actuarial gain/(loss)                               2,945           (2,369)           576         (3,950)
                                                         -------------     ------------    -----------    -----------
Prepaid (accrued) benefit cost                           $      27,307     $     (2,699)   $    24,608    $    26,977
                                                         =============     ============    ===========    ===========

Assumptions as of last day of February:
Rate of return on plan assets                                    8.00%            8.50%                         8.00%
Discount rate                                                    6.00%            7.25%                         6.50%
Increase in compensation levels                                  4.00%             -                            4.50%

Components of net periodic benefit cost for the
  twelve months ended the last day of February:
Service cost                                             $       4,299     $        336    $     4,635    $     1,335
Interest cost                                                   10,494              711         11,205          2,671
Expected return on plan assets                                 (15,533)            (807)       (16,340)        (3,848)
                                                         -------------     ------------    -----------    -----------
Net periodic benefit (income) cost                       $        (740)    $        240    $      (500)   $       158
                                                         =============     ============    ===========    ===========
</TABLE>

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:

     (in thousands)
     Change in benefit obligation:
     Benefit obligation at April 9, 1999                    $       698
     Service cost                                                    14
     Interest cost                                                   32
     Benefits paid                                                  (10)
     Actuarial gain                                                (110)
     Foreign currency exchange rate changes                          23
                                                            -----------
     Benefit obligation at February 29, 2000                $       647
                                                            ===========

     Funded status as of February 29, 2000:
     Funded status                                          $      (647)
     Unrecognized net gain                                         (111)
                                                            -----------
     Accrued benefit liability                              $      (758)
                                                            ===========

     Assumptions as of February 29, 2000:
     Discount rate                                                7.25%
     Increase in compensation levels                              4.00%

     Components of net periodic benefit cost for the
       period ended February 29, 2000:
     Service cost                                           $        14
     Interest cost                                                   32
                                                            -----------
     Net periodic benefit cost                              $        46
                                                            ===========


At February  29,  2000, a 9.2% 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 4.3%  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             $     72     $    (73)

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 only one vote per share but are entitled to a cash dividend premium.
If the Company pays a cash  dividend on 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 29, 2000,  there were 15,069,418  shares of Class A Common Stock and
3,119,835  shares  of  Class B  Convertible  Common  Stock  outstanding,  net of
treasury stock.

STOCK REPURCHASE AUTHORIZATION -
In January 1996, the Company's  Board of Directors  authorized the repurchase of
up to $30.0 million of its Class A Common Stock and Class B  Convertible  Common
Stock.  The  Company was  permitted  to finance  such  purchases,  which  became
treasury  shares,  through cash generated from  operations or through the senior
credit  facility.  Throughout  the year ended  February  28,  1997,  the Company
repurchased  787,450 shares of Class A Common Stock totaling $20.8 million.  The
Company  completed  its  repurchase  program  during  fiscal 1998,  repurchasing
362,100 shares of Class A Common Stock for $9.2 million.

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 1,018,836 shares of Class
A Common Stock for $44.9 million. No repurchases were made during fiscal 2000.

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 4,000,000  shares to 7,000,000  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 2000 and fiscal 1999, no stock appreciation  rights or
restricted stock were granted. At February 29, 2000, there were 3,557,568 shares
available for future grant.

A summary of nonqualified stock option activity is as follows:

                                               Weighted                 Weighted
                                               Average                  Average
                               Shares Under    Exercise     Options     Exercise
                                  Option        Price     Exercisable    Price
                               ------------    --------   -----------   --------
Balance, February 28, 1997        1,432,975    $  18.85      51,425     $  10.67
Options granted                     569,400    $  38.72
Options exercised                  (117,452)   $  15.33
Options forfeited/canceled          (38,108)   $  17.66
                               ------------
Balance, February 28, 1998        1,846,815    $  25.23     360,630     $  25.46
Options granted                     728,200    $  50.57
Options exercised                  (203,565)   $  20.08
Options forfeited/canceled         (116,695)   $  37.13
                               ------------
Balance, February 28, 1999        2,254,755    $  33.26     492,285     $  24.55
Options granted                     819,800    $  50.42
Options exercised                  (187,690)   $  17.92
Options forfeited/canceled         (148,615)   $  44.95
                               ------------
Balance, February 29, 2000        2,738,250    $  38.81     737,455     $  27.04
                               ============

The following table summarizes  information  about stock options  outstanding at
February 29, 2000:

                            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
---------------    -----------   -----------   --------   -----------   --------
$ 4.44 - $11.50         12,150     2.3 years   $  11.50        12,150   $  11.50
$17.00 - $25.63        633,420     5.4 years   $  17.28       365,280   $  17.42
$26.75 - $31.25        335,180     6.5 years   $  28.45       145,300   $  27.50
$35.38 - $50.00        940,600     8.5 years   $  45.41       185,325   $  42.76
$51.00 - $59.56        816,900     8.9 years   $  52.57        29,400   $  51.74
                   -----------                            -----------
                     2,738,250     7.6 years   $  38.81       737,455   $  27.04
                   ===========                            ===========

The weighted  average fair value of options  granted during fiscal 2000,  fiscal
1999, and fiscal 1998 was $26.28,  $26.21,  and $20.81,  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 5.7% for fiscal 2000, 5.3% for fiscal 1999, and 6.4% for fiscal
1998;  volatility of 40.0% for fiscal 2000, 40.6% for fiscal 1999, and 41.3% for
fiscal 1998;  expected option life of 7.0 years for fiscal 2000 and fiscal 1999,
and 6.9 years for fiscal 1998. The dividend yield was 0% for fiscal 2000, fiscal
1999, and fiscal 1998. Forfeitures are recognized as they occur.

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  1,000,000  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.
During fiscal 2000 and fiscal 1999, no incentive stock options were granted.

EMPLOYEE STOCK PURCHASE PLAN - The Company has a stock purchase plan under which
1,125,000  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 2000,  fiscal 1999, and fiscal 1998,  employees  purchased  31,062
shares, 49,850 shares, and 78,248 shares, respectively.

The weighted  average fair value of purchase  rights granted during fiscal 2000,
fiscal 1999, and fiscal 1998 was $12.18, $12.35, and $11.90,  respectively.  The
fair  value of  purchase  rights  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 5.4% for fiscal 2000,  4.7% for fiscal
1999, and 5.3% for fiscal 1998;  volatility of 33.6% for fiscal 2000,  33.5% for
fiscal 1999,  and 35.1% for fiscal  1998;  expected  purchase  right life of 0.5
years for fiscal 2000,  fiscal 1999,  and fiscal 1998. The dividend yield was 0%
for fiscal 2000, fiscal 1999, and fiscal 1998.

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 Year Ended
                                            February 29,              For the Years Ended February 28,
                                        --------------------    --------------------------------------------
                                                2000                    1999                    1998
                                        --------------------    --------------------    --------------------
                                           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                              $ 77,375    $ 71,474    $ 50,472    $ 46,942    $ 47,130    $ 43,230
                                        ========    ========    ========    ========    ========    ========
Earnings per common share:
  Basic                                 $   4.29    $   3.96    $   2.76    $   2.57    $   2.52    $   2.32
  Diluted                               $   4.18    $   3.86    $   2.69    $   2.50    $   2.47    $   2.26
</TABLE>

The pro  forma  effect on net  income  may not be  representative  of that to be
expected in future years.

<PAGE>

11.  EARNINGS PER COMMON SHARE:

The following table presents earnings per common share as follows:

                                             For the Year
                                                Ended        For the Years Ended
                                             February 29,        February 28,
                                             ------------    -------------------
                                                2000           1999       1998
                                             -----------     --------   --------
(in thousands, except per share data)
Income before extraordinary item             $    77,375     $ 61,909   $ 47,130
Extraordinary item, net of income taxes             -         (11,437)      -
                                             -----------     --------   --------
Income applicable to common shares           $    77,375     $ 50,472   $ 47,130
                                             ===========     ========   ========

Weighted average common shares
  outstanding - basic                             18,054       18,293     18,672
Stock options                                        445          461        433
                                             -----------     --------   --------
Weighted average common shares
  outstanding - diluted                           18,499       18,754     19,105
                                             ===========     ========   ========

Earnings per common share:
  Basic:
  Income before extraordinary item           $      4.29     $   3.38   $   2.52
  Extraordinary item                                -           (0.62)      -
                                             -----------     --------  ---------
  Earnings per common share - basic          $      4.29     $   2.76   $   2.52
                                             ===========     ========   ========

  Diluted:
  Income before extraordinary item           $      4.18     $   3.30   $   2.47
  Extraordinary item                                -           (0.61)      -
                                             -----------     --------  ---------
  Earnings per common share - diluted        $      4.18     $   2.69   $   2.47
                                             ===========     ========   ========

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)
                       2001            $  16,312
                       2002               14,867
                       2003               13,827
                       2004               12,936
                       2005               12,067
                       Thereafter         96,301
                                       ---------
                                       $ 166,310
                                       =========

Rental  expense was $17.4  million,  $8.2  million,  and $5.6 million for fiscal
2000, fiscal 1999, and fiscal 1998, 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  29, 2000,  aggregate  $28.4  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 29, 2000, 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 purchase contracts
with certain  growers and suppliers.  In addition,  the Company has entered into
other 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 eighteen  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 $126.8 million of grapes under these contracts
during  fiscal 2000.  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 approximately $800.5 million.

The Company's  aggregate  obligations under bulk wine purchase contracts will be
approximately $8.3 million over the remaining term of the contracts which expire
through fiscal 2001.

EMPLOYMENT CONTRACTS -
The Company has employment  contracts with certain of its executive officers and
certain other  management  personnel  with  remaining  terms of one year.  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 severance payments in the event
of specified  termination  of  employment.  The aggregate  commitment for future
compensation and severance,  excluding incentive bonuses, was $4.2 million as of
February 29, 2000, of which $2.0 million is accrued in other  liabilities  as of
February 29, 2000.

EMPLOYEES COVERED BY COLLECTIVE BARGAINING AGREEMENTS -
Approximately 31% of the Company's full-time employees are covered by collective
bargaining  agreements at February 29, 2000. Agreements expiring within one year
cover approximately 18% 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  17.1%,
25.2%,  and 26.4% of the  Company's  gross  sales  for the  fiscal  years  ended
February 29, 2000, February 28, 1999, and February 28, 1998, respectively. Gross
sales to the Company's largest customer, Southern Wine and Spirits,  represented
8.0%,  10.9%,  and 12.1% of the Company's gross sales for the fiscal years ended
February 29,  2000,  February  28,  1999,  and February 28, 1998,  respectively.
Accounts receivable from the Company's largest customer  represented 8.6%, 8.5%,
and 14.1% of the Company's  total  accounts  receivable as of February 29, 2000,
February 28, 1999,  and  February  28,  1998,  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.  SUMMARIZED FINANCIAL INFORMATION - SUBSIDIARY GUARANTORS:

The following table presents summarized  financial  information 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.  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.

<TABLE>
<CAPTION>
                                           Parent          Subsidiary        Subsidiary
                                           Company         Guarantors       Nonguarantors      Eliminations      Consolidated
                                         -----------      ------------      -------------      ------------      ------------
(in thousands)
<S>                                      <C>              <C>               <C>                <C>               <C>
BALANCE SHEET DATA:
February 29, 2000
-----------------
Current assets                           $   105,884      $    611,646      $     278,467      $       -         $    995,997
Noncurrent assets                        $   913,026      $  1,695,790      $      25,628      $ (1,281,650)     $  1,352,794
Current liabilities                      $   150,507      $     84,860      $     202,850      $       -         $    438,217
Noncurrent liabilities                   $ 1,230,139      $     97,410      $      62,185      $       -         $  1,389,734

February 28, 1999
-----------------
Current assets                           $   114,243      $    532,028      $     209,468      $       -         $    855,739
Noncurrent assets                        $   646,133      $    396,125      $     421,867      $   (526,088)     $    938,037
Current liabilities                      $   157,648      $    126,803      $     130,821      $       -         $    415,272
Noncurrent liabilities                   $   815,421      $     73,178      $      54,633      $       -         $    943,232

INCOME STATEMENT DATA:
For the year ended February 29, 2000
------------------------------------
Net sales                                $  620,631       $  1,305,032      $     761,762      $   (346,956)     $  2,340,469
Gross profit                             $  174,231       $    332,641      $     215,588      $       -         $    722,460
(Loss) income before income taxes        $     (192)      $     92,433      $      36,718      $       -         $    128,959
Net (loss) income                        $     (115)      $     55,460      $      22,030      $       -         $     77,375

For the year ended February 28, 1999
------------------------------------
Net sales                                $  615,270       $  1,080,466      $    158,761       $   (357,154)     $  1,497,343
Gross profit                             $  168,575       $    237,437      $     42,022       $       -         $    448,034
Income before income taxes
  and extraordinary item                 $    4,849       $     96,935      $      2,646       $       -         $    104,430
Net income                               $    2,861       $     45,781      $      1,830       $       -         $     50,472

For the year ended February 28, 1998
------------------------------------
Net sales                                $  562,760       $    985,757      $      2,197       $   (337,926)     $  1,212,788
Gross profit                             $  151,092       $    191,658      $      1,000       $       -         $    343,750
Income (loss) before income taxes        $   21,024       $     59,285      $       (428)      $       -         $     79,881
Net income (loss)                        $   12,404       $     35,154      $       (428)      $       -         $     47,130
</TABLE>

15.  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. The Company  believes the effect of the adoption on its
financial  statements  will not be material based on the Company's  current risk
management strategies.

16.  BUSINESS SEGMENT INFORMATION:

The Company  reports its operating  results in five segments:  Canandaigua  Wine
(branded  popularly-priced  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 the  summary  of  significant  accounting
policies.  The Company  evaluates  performance based on operating profits of the
respective business units.

Segment information is as follows:
<TABLE>
<CAPTION>

                                For the Year Ended
                                   February 29,      For the Years Ended February 28,
                                ------------------   --------------------------------
                                       2000               1999              1998
                                ------------------   -------------      -------------
(in thousands)
<S>                             <C>                  <C>                <C>
CANANDAIGUA WINE:
-----------------
Net sales:
  Branded:
    External customers          $          623,796   $     598,782      $     570,807
    Intersegment                             5,524            -                  -
                                ------------------   -------------      -------------
    Total Branded                          629,320         598,782            570,807
                                ------------------   -------------      -------------
  Other:
    External customers                      81,442          70,711             71,988
    Intersegment                             1,146            -                  -
                                ------------------   -------------      -------------
    Total Other                             82,588          70,711             71,988
                                ------------------   -------------      -------------
Net sales                       $          711,908   $     669,493      $     642,795
Operating profit                $           46,778   $      46,283      $      45,440
Long-lived assets               $          192,828   $     191,762      $     185,317
Total assets                    $          639,687   $     650,578      $     632,636
Capital expenditures            $           20,213   $      25,275      $      25,666
Depreciation and amortization   $           20,828   $      20,838      $      21,189

BARTON:
-------
Net sales:
  Beer                          $          570,380   $     478,611      $     376,607
  Spirits                                  267,762         185,938            191,190
                                ------------------   -------------      -------------
Net sales                       $          838,142   $     664,549      $     567,797
Operating profit                $          142,931   $     102,624      $      77,010
Long-lived assets               $           78,876   $      50,221      $      51,574
Total assets                    $          684,228   $     478,580      $     439,317
Capital expenditures            $            7,218   $       3,269      $       5,021
Depreciation and amortization   $           14,452   $      10,765      $      10,455

<PAGE>
<CAPTION>

                                For the Year Ended
                                    February 29,     For the Years Ended February 28,
                                ------------------   --------------------------------
                                       2000              1999               1998
                                ------------------   ------------       -------------
(in thousands)
<S>                             <C>                  <C>                <C>
MATTHEW CLARK:
--------------
Net sales:
  Branded:
    External customers          $          313,027   $     64,879       $        -
    Intersegment                                75           -                   -
                                ------------------   ------------       -------------
    Total Branded                          313,102         64,879                -
  Wholesale                                416,644         93,881                -
                                ------------------   ------------       -------------
Net sales                       $          729,746   $    158,760       $        -
Operating profit                $           48,473   $      8,998       $        -
Long-lived assets               $          158,119   $    169,693       $        -
Total assets                    $          636,807   $    631,313       $        -
Capital expenditures            $           17,949   $     10,444       $        -
Depreciation and amortization   $           20,238   $      4,836       $        -

FRANCISCAN:
-----------
Net sales:
  External customers            $           62,046   $       -          $        -
  Intersegment                                  73           -                   -
                                ------------------   ------------       -------------
Net sales                       $           62,119   $       -          $        -
Operating profit                $           12,708   $       -          $        -
Long-lived assets               $          106,956   $       -          $        -
Total assets                    $          357,999   $       -          $        -
Capital expenditures            $           10,741   $       -          $        -
Depreciation and amortization   $            6,028   $       -          $        -

CORPORATE OPERATIONS AND OTHER:
-------------------------------
Net sales                       $            5,372   $      4,541       $       2,196
Operating loss                  $          (15,849)  $    (12,013)      $     (10,380)
Long-lived assets               $            6,192   $     17,127       $       7,144
Total assets                    $           30,070   $     33,305       $      18,602
Capital expenditures            $            1,626   $     10,869       $         516
Depreciation and amortization   $            3,177   $      2,151       $       1,517

INTERSEGMENT ELIMINATIONS:
--------------------------
Net sales                       $           (6,818)  $       -          $        -

CONSOLIDATED:
-------------
Net sales                       $        2,340,469   $  1,497,343       $   1,212,788
Operating profit                $          235,041   $    145,892       $     112,070
Long-lived assets               $          542,971   $    428,803       $     244,035
Total assets                    $        2,348,791   $  1,793,776       $   1,090,555
Capital expenditures            $           57,747   $     49,857       $      31,203
Depreciation and amortization   $           64,723   $     38,590       $      33,161

</TABLE>

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.

<PAGE>

17.  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 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     $    661,520     $    527,200     $ 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                                        $     0.60     $     1.17     $       1.65     $       0.86     $      4.29
  Diluted                                      $     0.59     $     1.14     $       1.60     $       0.84     $      4.18


<CAPTION>
                                                                       QUARTER ENDED
                                               -----------------------------------------------------------
                                                 May 31,      August 31,     November 30,     February 28,
               Fiscal 1999                        1998           1998            1998             1999          Full Year
------------------------------------------     ----------     ----------     ------------     ------------     -----------
(in thousands, except per share data)
<S>                                            <C>            <C>            <C>              <C>              <C>
Net sales                                      $  312,928     $  349,386     $    375,586     $    459,443     $ 1,497,343
Gross profit                                   $   92,061     $  103,236     $    115,695     $    137,042     $   448,034
Income before extraordinary item               $   13,099     $   16,731     $     20,161     $     11,918     $    61,909
Extraordinary item, net of income taxes (2)    $     -        $     -        $       -        $    (11,437)    $   (11,437)
Net income                                     $   13,099     $   16,731     $     20,161     $        481     $    50,472
Earnings per common share: (1)
  Basic:
    Income before extraordinary item           $     0.70     $     0.90     $       1.13     $       0.67     $      3.38
    Extraordinary item                               -              -                -               (0.64)          (0.62)
                                               ----------     ----------     ------------     ------------     -----------
    Earnings per common share - basic          $     0.70     $     0.90     $       1.13     $       0.03     $      2.76
                                               ==========     ==========     ============     ============     ===========
  Diluted:
    Income before extraordinary item           $      0.68    $     0.88     $       1.10     $       0.65     $      3.30
    Extraordinary item                                -             -                -               (0.62)          (0.61)
                                               -----------    ----------     ------------     ------------     -----------
    Earnings per common share - diluted        $      0.68    $     0.88     $       1.10     $       0.03     $      2.69
                                               ===========    ==========     ============     ============     ===========
<FN>
(1)  The sum of the  quarterly  earnings  per  common  share in fiscal  2000 and
     fiscal 1999 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.

(2)  Represents  fees  related to the  replacement  of the prior  senior  credit
     facility, including extinguishment of the term loan.
</FN>
</TABLE>


18.  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 U.K. ($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.

19.  SUBSEQUENT EVENT:

On May 15, 2000, the Company issued (pound)80.0  million  (approximately  $120.4
million) aggregate principal amount of 8 1/2% Series C Senior Notes due November
2009 at an issuance price of (pound)79.6 million  (approximately $119.8 million,
net of $0.6  million  unamortized  discount,  with an  effective  rate of  8.6%)
("Sterling   Series  C  Senior  Notes").   The  net  proceeds  of  the  offering
((pound)78.8  million,  or  approximately  $118.6  million) were used to repay a
portion of the Company's  British  pound  sterling  borrowings  under its senior
credit facility.  After this repayment, the required quarterly repayments of the
Tranche II Term Loan facility were revised to (pound)0.2  million ($0.3 million)
for the remaining three quarters in 2000,  (pound)0.4 million ($0.6 million) for
each  quarter  in 2001 and 2002,  (pound)0.5  million  ($0.8  million)  for each
quarter in 2003,  and  (pound)8.5  million  ($12.8  million) for each quarter in
2004. (The foregoing U.S.  dollar  equivalents are as of May 15, 2000.) 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.

<PAGE>


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 18,
2000, 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 18, 2000,  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 18, 2000,  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 18, 2000,  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>


                                     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 29, 2000, and February 28,
               1999

               Consolidated  Statements  of Income for the years ended  February
               29, 2000, February 28, 1999, and February 28, 1998

               Consolidated  Statements of Changes in  Stockholders'  Equity for
               the years  ended  February  29,  2000,  February  28,  1999,  and
               February 28, 1998

               Consolidated  Statements  of  Cash  Flows  for  the  years  ended
               February 29, 2000, February 28, 1999, and February 28, 1998

               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 81 of this
          Report.

(b)  Reports on Form 8-K

     The  following  Report  on Form  8-K was  filed  by the  Company  with  the
     Securities and Exchange  Commission during the fourth quarter of the fiscal
     year ended February 29, 2000:

     Form 8-K dated January 4, 2000.  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, 1999  (unaudited)  and February 28, 1999
     (audited);  (ii) the Company's Condensed Consolidated  Statements of Income
     for the three months ended November 30, 1999  (unaudited)  and November 30,
     1998 (unaudited); and (iii) the Company's Condensed Consolidated Statements
     of Income for the nine  months  ended  November  30, 1999  (unaudited)  and
     November 30, 1998 (unaudited).

<PAGE>

                                   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 30, 2000                    CANANDAIGUA 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 30, 2000                        Officer)
                                            Dated: May 30, 2000


/s/ Robert Sands                            /s/ George Bresler
----------------------------------          ----------------------------------
Robert Sands, Director                      George Bresler, Director
Dated:  May 30, 2000                        Dated:  May 30, 2000


/s/ James A. Locke                          /s/ Thomas C. McDermott
----------------------------------          ----------------------------------
James A. Locke, III, Director               Thomas C. McDermott, Director
Dated:  May 30, 2000                        Dated:  May 30, 2000


/s/ Paul L. Smith
----------------------------------
Paul L. Smith, Director
Dated:  May 30, 2000








<PAGE>


                                   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 30, 2000                    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 30, 2000                        /s/ Ned Cooper
                                            ----------------------------------
                                            Ned Cooper, President
                                            (Principal Executive Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ----------------------------------
                                            Thomas S. Summer, Treasurer
                                            (Principal Financial Officer and
                                            Principal Accounting Officer)


Dated:  May 30, 2000                        /s/ Richard Sands
                                            ----------------------------------
                                            Richard Sands, Director


Dated:  May 30, 2000                        /s/ Robert Sands
                                            ----------------------------------
                                            Robert Sands, Director


<PAGE>


                                   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 30, 2000                    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 30, 2000                        /s/ Jon Moramarco
                                            ----------------------------------
                                            Jon Moramarco, President and Chief
                                            Executive Officer (Principal
                                            Executive Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ----------------------------------
                                            Thomas S. Summer, Treasurer
                                            (Principal Financial Officer and
                                            Principal Accounting Officer)


Dated:  May 30, 2000                        /s/ Richard Sands
                                            ----------------------------------
                                            Richard Sands, Director


Dated:  May 30, 2000                        /s/ Robert Sands
                                            ----------------------------------
                                            Robert Sands, Director


<PAGE>


                                   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 30, 2000                    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 30, 2000                        /s/ Douglas Kahle
                                            ----------------------------------
                                            Douglas Kahle, President
                                            (Principal Executive Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ----------------------------------
                                            Thomas S. Summer, Treasurer
                                            (Principal Financial Officer and
                                            Principal Accounting Officer)


Dated:  May 30, 2000                        /s/ Richard Sands
                                            ----------------------------------
                                            Richard Sands, Director


<PAGE>


                                   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 30, 2000                    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 30, 2000                        /s/ Robert Sands
                                            ---------------------------------
                                            Robert Sands, Chief Executive
                                            Officer and Director (Principal
                                            Executive Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ---------------------------------
                                            Thomas S. Summer, Finance
                                            Director (Principal Financial
                                            Officer and Principal Accounting
                                            Officer)


Dated:  May 30, 2000                        /s/ Peter Aikens
                                            ---------------------------------
                                            Peter Aikens, Director


Dated:  May 30, 2000                        /s/ Anne Colquhoun
                                            ---------------------------------
                                            Anne Colquhoun, Director


Dated:  May 30, 2000                        /s/ Hugh Etheridge
                                            ---------------------------------
                                            Hugh Etheridge, Director


<PAGE>


                                   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 30, 2000                    POLYPHENOLICS, INC.


                                        By: /s/ Howard Jacobson
                                            ---------------------------------
                                            Howard Jacobson, 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 30, 2000                    /s/ Howard Jacobson
                                            ---------------------------------
                                            Howard Jacobson, President and
                                            Director (Principal Executive
                                            Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ---------------------------------
                                            Thomas S. Summer, Vice President,
                                            Treasurer and Director (Principal
                                            Financial Officer and Principal
                                            Accounting Officer)





<PAGE>


                                   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 30, 2000                    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 30, 2000                        /s/ Thomas S. Summer
                                            ---------------------------------
                                            Thomas S. Summer, President and
                                            Treasurer (Principal Executive
                                            Officer, Principal Financial
                                            Officer and Principal Accounting
                                            Officer)


Dated:  May 30, 2000                        /s/ Richard Sands
                                            ---------------------------------
                                            Richard Sands, Director


Dated:  May 30, 2000                        /s/ Robert Sands
                                            ---------------------------------
                                            Robert Sands, Director


<PAGE>


                                   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 30, 2000                    CANANDAIGUA B.V.


                                        By: /s/ Thomas S. Summer
                                            ---------------------------------
                                            Thomas S. Summer, Authorized
                                            Representative

     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 30, 2000                        /s/ G.A.L.R. Diepenhorst
                                            ---------------------------------
                                            G.A.L.R. Diepenhorst, Managing
                                            Director (Principal Executive
                                            Officer)


Dated:  May 30, 2000                        /s/ E.F. Switters
                                            ---------------------------------
                                            E.F. Switters, Managing Director
                                            (Principal Financial Officer and
                                            Principal Accounting Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ---------------------------------
                                            Thomas S. Summer, Authorized
                                            Representative in the United
                                            States


<PAGE>


                                   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 30, 2000                    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 30, 2000                        /s/ Agustin Francisco Huneeus
                                            ---------------------------------
                                            Agustin Francisco Huneeus,
                                            President (Principal Executive
                                            Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ---------------------------------
                                            Thomas S. Summer, Vice President
                                            and Treasurer (Principal
                                            Financial Officer and Principal
                                            Accounting Officer)


Dated:  May 30, 2000                        /s/ Richard Sands
                                            ---------------------------------
                                            Richard Sands, Director


Dated:  May 30, 2000                        /s/ Robert Sands
                                            ---------------------------------
                                            Robert Sands, Director


<PAGE>


                                   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 30, 2000                    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 30, 2000                        /s/ Agustin Francisco Huneeus
                                            ---------------------------------
                                            Agustin Francisco Huneeus,
                                            President (Principal Executive
                                            Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ---------------------------------
                                            Thomas S. Summer, Vice President
                                            and Treasurer (Principal
                                            Financial Officer and Principal
                                            Accounting Officer)


Dated:  May 30, 2000                        /s/ Richard Sands
                                            ---------------------------------
                                            Richard Sands, Director


Dated:  May 30, 2000                        /s/ Robert Sands
                                            ---------------------------------
                                            Robert Sands, Director


<PAGE>


                                   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 30, 2000                    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 30, 2000                        /s/ Agustin Francisco Huneeus
                                            ---------------------------------
                                            Agustin Francisco Huneeus,
                                            President (Principal Executive
                                            Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ---------------------------------
                                            Thomas S. Summer, Vice President
                                            and Treasurer (Principal
                                            Financial Officer and Principal
                                            Accounting Officer)


Dated:  May 30, 2000                        /s/ Richard Sands
                                            ---------------------------------
                                            Richard Sands, Director

Dated:  May 30, 2000                        /s/ Robert Sands
                                            ---------------------------------
                                            Robert Sands, Director


<PAGE>


                                   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 30, 2000                    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 30, 2000                        s/ Agustin Francisco Huneeus
                                            --------------------------------
                                            Agustin Francisco Huneeus,
                                            President (Principal Executive
                                            Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ---------------------------------
                                            Thomas S. Summer, Vice President
                                            and Treasurer (Principal
                                            Financial Officer and Principal
                                            Accounting Officer)


Dated:  May 30, 2000                        /s/ Richard Sands
                                            ---------------------------------
                                            Richard Sands, Director


Dated:  May 30, 2000                        /s/ Robert Sands
                                            ---------------------------------
                                            Robert Sands, Director


<PAGE>


                                   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 30, 2000                    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 30, 2000                        /s/ Agustin Francisco Huneeus
                                            ---------------------------------
                                            Agustin Francisco Huneeus,
                                            President (Principal Executive
                                            Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ---------------------------------
                                            Thomas S. Summer, Vice President
                                            and Treasurer (Principal
                                            Financial Officer and Principal
                                            Accounting Officer)


Dated:  May 30, 2000                        /s/ Richard Sands
                                            ---------------------------------
                                            Richard Sands, Director


Dated:  May 30, 2000                        /s/ Robert Sands
                                            ---------------------------------
                                            Robert Sands, Director


<PAGE>


                                   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 30, 2000                    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 30, 2000                        /s/ Alexander L. Berk
                                            ---------------------------------
                                            Alexander L. Berk, President,
                                            Chief Executive Officer and
                                            Director (Principal Executive
                                            Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ---------------------------------
                                            Thomas S. Summer, Vice President
                                            (Principal Financial Officer and
                                            Principal Accounting Officer)


Dated:  May 30, 2000                        /s/ Troy Christensen
                                            ---------------------------------
                                            Troy Christensen, Director


Dated:  May 30, 2000                        /s/ Edward L. Golden
                                            ---------------------------------
                                            Edward L. Golden, Director


Dated:  May 30, 2000                        /s/ William F. Hackett
                                            ---------------------------------
                                            William F. Hackett, Director


Dated:  May 30, 2000                        /s/ Elizabeth Kutyla
                                            ---------------------------------
                                            Elizabeth Kutyla, Director


Dated:  May 30, 2000                        /s/ Richard Sands
                                            ---------------------------------
                                            Richard Sands, Director


Dated:  May 30, 2000                        /s/ Robert Sands
                                            ---------------------------------
                                            Robert Sands, Director

<PAGE>

                                   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 30, 2000                    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 30, 2000                        /s/ Edward L. Golden
                                            ---------------------------------
                                            Edward L. Golden, President and
                                            Director (Principal Executive
                                            Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ---------------------------------
                                            Thomas S. Summer, Vice President
                                            (Principal Financial Officer and
                                            Principal Accounting Officer)


Dated:  May 30, 2000                        /s/ Alexander L. Berk
                                            ---------------------------------
                                            Alexander L. Berk, Director


Dated:  May 30, 2000                        /s/ Troy J. Christensen
                                            ---------------------------------
                                            Troy J. Christensen, Director


Dated:  May 30, 2000                        /s/ Elizabeth Kutyla
                                            ---------------------------------
                                            Elizabeth Kutyla, Director


<PAGE>


                                   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 30, 2000                    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 30, 2000                        /s/ Richard Sands
                                            ---------------------------------
                                            Richard Sands, Chief Executive
                                            Officer and Director (Principal
                                            Executive Officer)


Dated:  May 30, 2000                        /s/ Thomas S.Summer
                                            ---------------------------------
                                            Thomas S. Summer, Vice President
                                            (Principal Financial Officer and
                                            Principal Accounting Officer)


Dated:  May 30, 2000                        /s/ Alexander L. Berk
                                            ---------------------------------
                                            Alexander L. Berk, Director


Dated:  May 30, 2000                        /s/ Troy J. Christensen
                                            ---------------------------------
                                            Troy J. Christensen, Director


Dated:  May 30, 2000                        /s/ William F. Hackett
                                            ---------------------------------
                                            William F. Hackett, Director


Dated:  May 30, 2000                        /s/ Elizabeth Kutyla
                                            ---------------------------------
                                            Elizabeth Kutyla, Director


<PAGE>


                                   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 30, 2000                    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 30, 2000                        /s/ Alexander L. Berk
                                            ---------------------------------
                                            Alexander L. Berk, President and
                                            Director (Principal Executive
                                            Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ---------------------------------
                                            Thomas S. Summer, Vice President
                                            (Principal Financial Officer and
                                            Principal Accounting Officer)


Dated:  May 30, 2000                        /s/ Troy J. Christensen
                                            ---------------------------------
                                            Troy J. Christensen, Director


Dated:  May 30, 2000                        /s/ Edward L. Golden
                                            ---------------------------------
                                            Edward L. Golden, Director


Dated:  May 30, 2000                        /s/ Elizabeth Kutyla
                                            ---------------------------------
                                            Elizabeth Kutyla, Director


<PAGE>


                                   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 30, 2000                    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 30, 2000                        /s/ Alexander L. Berk
                                            ---------------------------------
                                            Alexander L. Berk, President and
                                            Director (Principal Executive
                                            Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ---------------------------------
                                            Thomas S. Summer, Vice President
                                            (Principal Financial Officer and
                                            Principal Accounting Officer)


Dated:  May 30, 2000                        /s/ Troy J. Christensen
                                            ---------------------------------
                                            Troy J. Christensen, Director


Dated:  May 30, 2000                        /s/ Edward L. Golden
                                            ---------------------------------
                                            Edward L. Golden, Director


Dated:  May 30, 2000                        /s/ Elizabeth Kutyla
                                            ---------------------------------
                                            Elizabeth Kutyla, Director


<PAGE>


                                   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 30, 2000                    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 30, 2000                        /s/ Alexander L. Berk
                                            ---------------------------------
                                            Alexander L. Berk, President and
                                            Director (Principal Executive
                                            Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ---------------------------------
                                            Thomas S. Summer, Vice President
                                            (Principal Financial Officer and
                                            Principal Accounting Officer)


Dated:  May 30, 2000                        /s/ Troy J. Christensen
                                            ---------------------------------
                                            Troy J. Christensen, Director


Dated:  May 30, 2000                        /s/ Edward L. Golden
                                            ---------------------------------
                                            Edward L. Golden, Director


Dated:  May 30, 2000                        /s/ Elizabeth Kutyla
                                            ---------------------------------
                                            Elizabeth Kutyla, Director


<PAGE>


                                   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 30, 2000                    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 30, 2000                        /s/ Alexander L. Berk
                                            ---------------------------------
                                            Alexander L. Berk, President and
                                            Director (Principal Executive
                                            Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ---------------------------------
                                            Thomas S. Summer, Vice President
                                            (Principal Financial Officer and
                                            Principal Accounting Officer)


Dated:  May 30, 2000                        /s/ Troy J. Christensen
                                            ---------------------------------
                                            Troy J. Christensen, Director


Dated:  May 30, 2000                        /s/ Edward L. Golden
                                            ---------------------------------
                                            Edward L. Golden, Director


Dated:  May 30, 2000                        /s/ Elizabeth Kutyla
                                            ---------------------------------
                                            Elizabeth Kutyla, Director


<PAGE>


                                   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 30, 2000                    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 30, 2000                        /s/ Troy J. Christensen
                                            ---------------------------------
                                            Troy J. Christensen, President,
                                            Secretary and Director (Principal
                                            Executive Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ---------------------------------
                                            Thomas S. Summer, Vice President
                                            (Principal Financial Officer and
                                            Principal Accounting Officer)


Dated:  May 30, 2000                        /s/ Charles T. Schlau
                                            ---------------------------------
                                            Charles T. Schlau, Director


<PAGE>


                                   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 30, 2000                    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 30, 2000                        /s/ James P. Ryan
                                            ---------------------------------
                                            James P. Ryan, President, Chief
                                            Executive Officer and Director
                                            (Principal Executive Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ---------------------------------
                                            Thomas S. Summer, Vice President
                                            (Principal Financial Officer and
                                            Principal Accounting Officer)


Dated:  May 30, 2000                        /s/ Alexander L. Berk
                                            ---------------------------------
                                            Alexander L. Berk, Director


Dated:  May 30, 2000                        /s/ Troy J. Christensen
                                            ---------------------------------
                                            Troy J. Christensen, Director


Dated:  May 30, 2000                        /s/ William F. Hackett
                                            ---------------------------------
                                            William F. Hackett, Director


Dated:  May 30, 2000                        /s/ Elizabeth Kutyla
                                            ---------------------------------
                                            Elizabeth Kutyla, Director


<PAGE>


                                   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 30, 2000                    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 30, 2000                        /s/ James P. Ryan
                                            ---------------------------------
                                            James P. Ryan, Chief Executive
                                            Officer (Principal Executive
                                            Officer)


Dated:  May 30, 2000                        /s/ Thomas S. Summer
                                            ---------------------------------
                                            Thomas S. Summer, Vice President
                                            (Principal Financial Officer and
                                            Principal Accounting Officer)


Dated:  May 30, 2000                        /s/ Alexander L. Berk
                                            ---------------------------------
                                            Alexander L. Berk, Director


Dated:  May 30, 2000                        /s/ Troy J. Christensen
                                            ---------------------------------
                                            Troy J. Christensen, Director


Dated:  May 30, 2000                        /s/ William F. Hackett
                                            ---------------------------------
                                            William F. Hackett, Director


Dated:  May 30, 2000                        /s/ Elizabeth Kutyla
                                            ---------------------------------
                                            Elizabeth Kutyla, Director

<PAGE>

                                INDEX TO EXHIBITS

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

        2.1     Asset   Purchase   Agreement   among  Barton   Incorporated   (a
                wholly-owned  subsidiary  of  the  Company),  United  Distillers
                Glenmore,  Inc.,  Schenley  Industries,  Inc., Medley Distilling
                Company, United Distillers  Manufacturing,  Inc., and The Viking
                Distillery,  Inc.,  dated August 29, 1995 (filed as Exhibit 2(a)
                to the Company's  Current  Report on Form 8-K,  dated August 29,
                1995 and incorporated herein by reference).

        2.2     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).

        2.3     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).

        2.4     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.
                (filed as Exhibit 2.1 to the  Company's  Current  Report on Form
                8-K dated June 4, 1999 and incorporated herein by reference).

        2.5     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).

        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, 1998 and incorporated herein
                by reference).

        3.2     Amended and  Restated  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, 1998 and incorporated  herein by
                reference).

        4.1     Indenture, 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).

        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 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 with respect to 8 1/2% Senior  Subordinated  Notes due
                2009,  dated as of February  25,  1999,  among the  Company,  as
                issuer, its principal operating 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, dated as of February 25, 1999, by
                and  among the  Company,  as  Issuer,  its  principal  operating
                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, dated as of August 4, 1999, by and
                among  the  Company,   as  Issuer,   its   principal   operating
                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, dated as of May 15,  2000 by and
                among  the  Company,   as  Issuer,   its   principal   operating
                subsidiaries,  as Guarantors, and Harris Trust and Savings Bank,
                as Trustee (filed herewith).

        4.18    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).

        4.19    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.
                333-9436902) 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    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).

        10.9    Amendment  Number One to the Incentive  Stock Option Plan of the
                Company (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).

        10.10   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).

        10.11   Amendment Number One to the Annual Management  Incentive 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, 1998
                and incorporated herein by reference).

        10.12   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).

        10.13   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).

        10.14   First Amendment to the Supplemental Executive Retirement Plan of
                the  Company  (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).

        10.15   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).

        10.16   Letter Agreement between the Company and Thomas S. Summer, dated
                March 10, 1997, addressing compensation (filed herewith).

        10.17   Service  Agreement,  as amended,  between  Matthew Clark plc and
                Peter Aikens, dated September 27, 1991 (filed herewith).

        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).

        27.1    Financial Data  Schedule for the fiscal year ended  February 29,
                2000 (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 1989 Employee  Stock Purchase Plan of
                the  Company  (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).