EXHIBIT 18.1
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ARTHUR
ANDERSEN
Arthur Andersen LLP
Suite 1500
One Marine Midland Plaza
Rochester NY 14604-2494
716 399 2800
April 22, 1999
Canandaigua Brands, Inc.
Re: Form 10-K Report for the year ended February 28, 1999
Gentlemen/Ladies:
This letter is written to meet the requirements of Regulation S-K calling for a
letter from a registrant's independent accountants whenever there has been a
change in accounting principle or practice.
As of February 28, 1999, the Company changed from the last-in, first-out
("LIFO") method of accounting for inventories to the first-in, first-out
("FIFO") method. According to the management of the Company, this change was
made for the following reasons: (1) a better matching of revenues and expenses
of the Company's products sold, and therefore a better method of reporting the
Company's results of operations; and (2) the FIFO method of accounting will
provide improved financial comparability to other publicly-traded companies in
the industry.
A complete coordinated set of financial and reporting standards for determining
the preferability of accounting principles among acceptable alternative
principles has not been established by the accounting profession. Thus, we
cannot make an objective determination of whether the change in accounting
described in the preceding paragraph is to a preferable method. However, we have
reviewed the pertinent factors, including those related to financial reporting,
in this particular case on a subjective basis, and our opinion stated below is
based on our determination made in this manner.
We are of the opinion that the Company's change in method of accounting is to an
acceptable alternative method of accounting, which, based upon the reasons
stated for the change and our discussions with you, is also preferable under the
circumstances in this particular case. In arriving at this opinion, we have
relied on the business judgment and business planning of your management.
Very truly yours,
/s/ Arthur Andersen LLP