Foster’s wine business below expectations

Source: Food and Drink Digital

Date :26/08/2008 16:50:19

Foster’s Group Ltd has seen profits slump 88 percent in the year to June as its wine business fails to meet expectations.

The Australian brewing group has reported that net profit fell to AUS$117.7 million from AUS$966.2 million in the prior year, its first loss in 16 years.

The beer and winemaker has had to write-down the value of its Australian and Californian wine assets by more than AUS$700 million.

The company said that beer remained the “backbone” of its business and confirmed that the market is expected to be resilient, while wine sees slow growth.

“We have not been immune from industry-wide pressures including an economic slowdown in key markets and higher grape prices,” said acting Chief Executive Ian Johnston.

Sales of brands such as Rosemount, Beringer and Lindemans have dropped 5.7 percent due to lower demand for Australian wine in the US.

A review of Foster’s wine business may see some of the business sold or a separate stock market listing.