Number two, the completion of our transaction with Gallo to divest a number of our lower-end wine brands priced at $11 and below in retail has set the stage for accelerated growth and profitability, driving focus more fully on a tighter set of powerful brands that already have traction with consumers.
Despite the challenges posed by COVID-19, including the continued partial closure of the on-premise, which was down about 35% year over year, Constellation's beer business continues to be one of the largest contributors to U.S. beer industry growth, delivering depletion trends of plus 12% in the quarter.
And while some depletion growth we saw this quarter included benefits from inventory restocking, the portfolio delivered accelerating underlying trends that align with our sales growth projection of 7% to 9% for the foreseeable future, as consumer demand remains exceptionally strong for our products across the majority of the portfolio.
In fact, Constellation's beer portfolio posted IRI consumer takeaway dollar growth of more than 15% for the third quarter.
The Corona Brand family grew nearly 12% in IRI channels, led by particularly strong contributions from Corona Premier, Corona Hard Seltzer and Corona Extra.
It also has the distinction of being the second fastest moving Hard Seltzer among major seltzer brands, while continuing to maintain strong incrementality levels at nearly 90%.
2, which will offer consumers the same great Corona taste and refreshment attributes while expanding to new flavors, including pineapple, strawberry, raspberry and passion fruit.
2 will be followed shortly thereafter by the introduction of another exciting new hard seltzer initiative.
This exceptional brand has excellent marketplace momentum and achieved the number one spot as the top share gaining imported beer in the U.S. beer category, with depletion growth of almost 20%.
Finally, Pacifico was also a top share gainer within the import segment during the quarter, continuing its strong momentum with depletion growth of nearly 20%.
From an operational perspective, we plan to complete the 5 million hectoliter expansion of our Obregon facility in early fiscal 2022, which is a slight delay versus our original plans due to pandemic-related construction slowdowns for this project last year.
Overall, our excellent year-to-date results provide confidence in our ability to achieve 7% to 9% net sales growth for fiscal 2021.
In addition, we have increased our operating income growth target to 8% to 10% for the year.
With the completion of the divestitures, we believe the wine and spirits business is positioned to grow net sales low-to-mid single digits, while producing operating income growth ahead of net sales growth as the business works to take out stranded costs and execute against other cost, price mix and efficiency improvements to achieve a 30% operating margin over the medium-term.
In the near-term, we expect the remaining portfolio post the Gallo deal to generate fiscal 2021 net sales growth in the 2% to 4% range.
Furthermore, it is important to our growth and margin profile that we continue to invest in this space, since DTC is heavily weighted toward the higher end of the wine category as wines priced $20 up, make up nearly 90% of total DTC sales.
We are pleased with the progress the Canopy Growth team has made in defining and strategically positioning themselves in the U.S. CBD and legal THC cannabis markets, which will be beneficial upon U.S. federal permissibility, which was probably enhanced with the change in the Senate that's occurred in the last 48 hours.
In fact, Canopy predicts that CBD beverages can grow at a 35% CAGR through 2025 as consumer realize the compelling benefits from CBD beverages.
The completion of our transaction with Gallo to divest a number of lower end brands priced at $11 and below at retail has set the stage for accelerated growth and profitability.
Our excellent third-quarter performance drove strong cash generation, which coupled with the finalization of the Gallo deal, enhances the financial profile of our business, enables further debt reduction and allows us to continue to execute our commitment to return $5 billion in value to our shareholders through fiscal 2023.
Specifically, during our third quarter, we generated comparable basis EPS, excluding Canopy Growth of $3.16, an increase of 32% versus prior year, delivered strong operating margin and accelerating double-digit depletion growth for our beer business and increased operating cash flow and free cash flow by 14% and 23% respectively, resulting in ongoing debt repayment and achievement of target net leverage, excluding Canopy equity earnings as we ended the quarter at 3.3 times.
Post transaction closing, we are left with a more focused and premium portfolio which nicely positions our wine and spirits business to produce low-to-mid single-digit topline growth, while migrating to an operating margin of 30% in the medium-term.
In total, at transaction close, Constellation received cash of approximately $560 million and the opportunity to receive up to $250 million in earnouts if brand performance targets are met over a three-year period after closing.
We also received approximately $130 million related to the closing of the Nobilo deal and expect to receive approximately $265 million from Sazerac upon closing the Paul Masson Grande Amber Brandy deal.
In total, from all transactions, we expect to receive approximately $955 million before tax and we expect the overall tax payments related to the transactions to be approximately $50 million, which are expected to be paid in fiscal 2022.
The cash proceeds from these transactions will facilitate further debt reduction, so we can continue to execute on our commitment to lower our leverage ratio and to return $5 billion in value to shareholders through dividends and share repurchases through fiscal 2023.
Due to the continued resiliency of our business and further clarity of the operating environment, we have issued fiscal 2021 earnings per share guidance and are projecting our comparable basis diluted earnings per share to range between $9.80 and $10.05.
Net sales increased 28% and shipment volume growth of 27%.
Excluding the impact of the Ballast Point divestiture, organic net sales increased 30% driven by organic shipment volume growth of 28% in favorable price and mix.
Depletion volume for the quarter accelerated and achieved 12% growth as inventory levels improved and strong performance continued in the off-premise channel, which more than offset the impact of approximately 35% year-over-year reduction in the on-premise channel due to COVID-19.
As product inventories begin to rebuild from a COVID-related slowdown of Mexican beer production earlier in the fiscal year, this resulted in Q3 year-to-date organic shipment and depletion volume growth of approximately 6% to 7%, which is in line with our medium-term goals and accounts for volume timing between quarters.
Beer operating margin increased 330 basis points versus prior year to 42.6%.
However, due to favorable leverage driven by increased throughput at our breweries, marketing as a percent of net sales decreased 170 basis points to 9.3%.
We expect net sales growth of 7% to 9%, which includes one to two points of pricing within our Mexican product portfolio.
Excluding the impact to Ballast Point, we expect organic net sales to land in the higher end of the 7% to 9% range.
We now expect fiscal 2021 operating income growth of 8% to 10%, which is an increase versus our prior guidance provided during the quarter.
Furthermore, we expect full-year operating margin to range between 40% and 41%, achieving margin expansion versus prior-year operating margin of 40%.
We also expect margin headwinds related to incremental headcount driven by the 5 million hectoliter expansion at Obregon, which is now expected to be completed in early fiscal 2022.
Q3 Power Brand depletion volume accelerated and achieved nearly 4% growth as these brands continue to win in the higher-end and across the majority of price segments in the U.S. wine category.
Overall depletion volume declined 1%, which reflected the brands recently divested.
Wine and spirits net sales increased 10%, and shipment volume up 3% driven by our Power Brands, as well as strong innovation contributions.
Excluding the impact of the Black Velvet divestiture, organic net sales increased 13%, reflecting shipment volume growth of approximately 7%.
Operating margin decreased 200 basis points to 24% as benefits from price and mix were more than offset by higher COGS and increased marketing, driven by the shift in spend from the first half.
Higher COGS was mostly driven by unfavorable fixed cost absorption of $20 million resulting from decreased production levels as a result of the wildfires.
However, we still expect to incur approximately $10 million of costs in Q4 associated with unfavorable fixed cost absorption due to the wildfires.
During the quarter, we also recognized a $26.5 million loss in connection with the writedown of certain grapes as a result of smoke damage sustained during the wildfires.
Even though margins for the segment took a step back during Q3, the underlying fundamentals of our consumer-led premiumization strategy continue to shine through as significant mix and price were generated during the quarter.
We now expect fiscal 2021 wine and spirits net sales and operating income to decline 9% to 11% and 16% to 18% respectively, which reflects the closing of the Gallo transaction, including Nobilo and the concentrate transaction, as well as the Paul Masson divestiture.
In addition, we expect the retained portfolio post divestitures to grow net sales in the 2% to 4% range this year.
Fiscal year-to-date corporate expenses came in at approximately $171 million, up 15% versus Q3 year to date last year.
We now expect full-year corporate expense to approximate $240 million.
Comparable basis interest expense for the quarter decreased 7% to approximately $96 million primarily due to lower average borrowings as we continued to decrease our leverage ratio.
Fiscal 2021 interest expense is now expected to approximate $390 million.
Our Q3 comparable basis effective tax rate, excluding Canopy equity earnings came in at 17.7% versus 17.5% in Q3 last year, primarily driven by higher effective tax rate on our foreign businesses, partially offset by an increased benefit from stock-based compensation.
As indicated last quarter, we expect our full-year fiscal 2021 comparable effective tax rate, excluding Canopy equity and earnings impact to approximate 19%, which would imply an increase in the Q4 tax rate driven by the timing of stock-based compensation benefits.
We generated free cash flow of $1.9 billion for the first nine months of fiscal 2021.
This represents an impressive 23% increase and reflects strong operating cash flow and lower capex.
We are projecting full-year fiscal 2021 capex spend to be in the range of $800 million to $900 million, which includes $650 million to $750 million of beer capex as we expect an acceleration of spend during Q4, driven by the 5 million hectoliter expansion at Obregon.
Furthermore, we expect fiscal 2021 free cash flow to be in the range of $1.7 billion to $1.8 billion and operating cash flow to be in the range of $2.5 billion to $2.7 billion.
In Q3, we recognized a $770 million increase in fair value of our Canopy investments.
The total pre-tax net gain recognized since our initial Canopy investment in November of 2017 is $834 million, which increased significantly from Q2 driven by Canopy's robust share price movement during the quarter.
As a result of our strong cash generation profile, we've reduced our net debt by $1.2 billion since the end of fiscal 2020, which has led to further reduction of our leverage ratio to our target range.
These financial strides coupled with the fact that our business has continued to remain resilient through this economic environment, now provides us with the flexibility to be opportunistic and resume share repurchase activity in the near-term as we remain fully committed to our goal of returning $5 billion to shareholders through dividends and share repurchases through fiscal 2023.
We are also pleased that the board of directors recently authorized an additional $2 billion for share repurchases.

Summary:
And while some depletion growth we saw this quarter included benefits from inventory restocking, the portfolio delivered accelerating underlying trends that align with our sales growth projection of 7% to 9% for the foreseeable future, as consumer demand remains exceptionally strong for our products across the majority of the portfolio.
2, which will offer consumers the same great Corona taste and refreshment attributes while expanding to new flavors, including pineapple, strawberry, raspberry and passion fruit.
2 will be followed shortly thereafter by the introduction of another exciting new hard seltzer initiative.
Overall, our excellent year-to-date results provide confidence in our ability to achieve 7% to 9% net sales growth for fiscal 2021.
In the near-term, we expect the remaining portfolio post the Gallo deal to generate fiscal 2021 net sales growth in the 2% to 4% range.
Specifically, during our third quarter, we generated comparable basis EPS, excluding Canopy Growth of $3.16, an increase of 32% versus prior year, delivered strong operating margin and accelerating double-digit depletion growth for our beer business and increased operating cash flow and free cash flow by 14% and 23% respectively, resulting in ongoing debt repayment and achievement of target net leverage, excluding Canopy equity earnings as we ended the quarter at 3.3 times.
Due to the continued resiliency of our business and further clarity of the operating environment, we have issued fiscal 2021 earnings per share guidance and are projecting our comparable basis diluted earnings per share to range between $9.80 and $10.05.
We expect net sales growth of 7% to 9%, which includes one to two points of pricing within our Mexican product portfolio.
Excluding the impact to Ballast Point, we expect organic net sales to land in the higher end of the 7% to 9% range.
Even though margins for the segment took a step back during Q3, the underlying fundamentals of our consumer-led premiumization strategy continue to shine through as significant mix and price were generated during the quarter.
We now expect fiscal 2021 wine and spirits net sales and operating income to decline 9% to 11% and 16% to 18% respectively, which reflects the closing of the Gallo transaction, including Nobilo and the concentrate transaction, as well as the Paul Masson divestiture.
In addition, we expect the retained portfolio post divestitures to grow net sales in the 2% to 4% range this year.
Furthermore, we expect fiscal 2021 free cash flow to be in the range of $1.7 billion to $1.8 billion and operating cash flow to be in the range of $2.5 billion to $2.7 billion.
We are also pleased that the board of directors recently authorized an additional $2 billion for share repurchases.