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Constellation closes two Ballast Point facilities, scraps future build

Constellation Ballast Point Closures

Ballast Point Brewing, who was purchased for a whopping $1 billion dollars in 2015, is downsizing.

“Trade Street”, Ballast Point’s 80,000 square foot barrel-aging facility which includes a good bit of the brewery’s sour/wild ale program will close. Addtionally, the brewery’s Temecula, California location will also close.

Last night, a future ex-employee of Ballast Point Brewing contacted us at Beer Street Journal, speaking off the record in regards to the recent moves. Last August, Constellation surprised more than 60 people, some who had only worked for Constellation a few weeks (we know of folks that left other craft breweries for positions at Constellation just weeks) were all laid off. Constellation reportedly handed the craft sales over to the Modelo import team going forward.

These recent closures and job cuts are, what is characterized by our now unemployed Ballast Point source, as Constellation “right-sizing” the Ballast Point business wing. Or – Ballast Point was not profitable as-is. It’s corporate speak for firing people. This downsizing is seemingly a direct correlation to a reported $86 million dollar impairment charge Constellation recorded for Ballast Point trademarks last summer.

An impairment charge is entered as an expense in the profit & loss account. The carrying amount of the asset is reduced by the impairment amount. This reduces the company’s net worth or book value. The net profit, too, is adversely affected in the year the charge is made. In other words, Ballast Point was grossly overvalued by Constellation Brands, prompting this “right-sizing” move.

The future Ballast Point location in San Francisco has also been scrapped.

There is no confirmed number of the employees affected by the immediate closure of the Temecula location and gradual closure Trade Street facility.

Emails to Constellation have not been returned.