February 23, 2009
just-drinks.com editor's weekly highlights
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Months of feverish speculation were brought to an end last week as Foster's informed the world that it would, after all, hang on to its wine business.
Well, at least, that's partially true. In fact, Foster's plans to shave significant amounts of fat off its wine arm, with 37 brands and more than 30 “non-core vineyards” heading for the chop. And, while speculation about a sell-off was hushed , it was far from silenced.
Foster's chairman David Crawford, who led the strategic review on the wine business, quite openly admitted that “a poor financial climate” means it is “not the appropriate time to sell”. The wine division is also to be “structurally separated” from beer and spirits.
So, perhaps the door is not entirely closed. A streamlined wine business, including the Penfolds and Lindemans brands, would likely be a more attractive proposition.
The firm's move may yet also prove a blueprint for the entire Australian wine industry, which is facing tough choices on how to marry supply and demand going forward.
In the news pages last week, Carlsberg and Heineken reported their first FY figures since carving up Scottish & Newcastle (S&N). Heineken appears to have come out worst, seeing profit nosedive 74% on write-down charges, a number of which were related to poor performances with S&N businesses.
Pernod CEO Pierre Pringuet whizzed over to London last week to flesh out the French group's first half results. The group may profit from a plan to cut advert spend in H2.
just-drinks caught up with Absolut vodka CEO Ketil Eriksen to talk about life under Pernod and also some slightly concerning volume figures for the brand in the US, its largest market. We'll publish our report on the full interview on Tuesday 24 February.
Over in the UK and Ireland, recession continues to bite hard. C&C Group, owner of Magners and Bulmers cider, announced plans to cut 121 jobs, or about 18% of its workforce.
Until next time...
Olly Wehring, Managing Editor
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The Pepsi Bottling Group said that while near-term economic difficulty would hurt drinks sales, the company would position itself to capitalise once the economy improves.
The beginning of a new year once again sees the publication of the Euromonitor International industry outlook from just-drinks, which takes stock of the current state of play in the spirits, beer, wine and soft drinks sectors and looks ahead to what promises to be an exciting and busy year across all four categories. The expected activity in our industry, however, will play out against a background of economic gloom, which looks set to contaminate all areas of all businesses.
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