Fosterís wine woes continue

26 August, 2008

Speculation is mounting that Fosterís will sell off its wine interests after the Australian drinks giant reported its first loss in 16 years.

The Melbourne-based beer and wine producer posted a six-month loss of around £134 million, and analysts believe the company is ready to offload a wine portfolio which includes names such as Penfolds, Hardys, Lindemans, Rosemount and Beringer.

Its global wine earnings were down by 32% and volumes in the US market declined by 5.7%. The situation in the companyís Europe, Middle East & Africa division was not as downbeat, with Fosterís reporting progress on some key brands.

If Fosterís pursues a sale of the wine division it may find it is worth 44% less than the money it spent creating it, according to Credit Suisse.

Acting chief executive Ian Johnston said: ďPut simply, financial returns from wine have not met our expectations. We are making good progress with our wine review but wonít be commenting on our analysis or conclusions until the review is completed.Ē

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