Asia-based investors have dominated international interest in the sale of Foster's Australian wine assets, but prices are under pressure.

Interest from Asia has been strongest, according to Colliers International, the agency handling the international marketing of Foster's Australian wine assets.

"We are fielding inquiries from this market regularly. Obviously the opportunity to acquire quality Australian vineyard assets to supply the growing Chinese market is attractive," Tim Altschwager, senior sales executive in Colliers' Rural and Agribusiness division, told just-drinks today (19 June).

Foster's is selling 4,000 hectares of vineyards in Australia and the US, following a review of its under-performing wine division. The sale includes the 139-year-old Baileys of Glenrowan, in Victoria.

Altschwager said that prices are under pressure due to the sheer number of wine assets currently on sale in Australia.

Foster's rival Constellation Brands still has vineyards on the market after announcing a restructuring programme last year, while reports have estimated that up to A$800m-worth of wine assets may be on public and private sale across Australia.

"There has not been much sales activity, so it's very hard to gauge what prices vineyards will transact at," said Altschwager.

"We suspect that if and when buyers get the appetite back for vineyards, a fall of 20% to 30% will be seen for good quality vineyards and even more severe falls for poor quality vineyards that are challenged by varietal mix and water supply."

A sale of Poplars Winery, which is not part of the Foster's sale, may fetch up to A$8m, said Altschwager.

Some analysts believe the Government will step in to buy Foster's assets in the Murray-Darling, in order to preserve water resources in this crucial region for Australian agriculture.

Grape oversupply has hammered Australia's wine industry in recent years, with prolonged periods of drought putting a strain on water resources.

The Australian Bureau of Agricultural and Resource Economics has estimated the 2009 winegrape harvest at 1.6m tonnes, up to 14% above the 1.4-1.5m tonnes needed to satisfy domestic and export sales.

Australian wine exports slid 18% by value to A$2.46bn last year, according to the Australian Wine and Brandy Corporation. Exports by volume slipped 11%.

"There is now a strong case for downsizing," Lawrie Stanford, information and analysis manager at AWBC told just-drinks at the end of last year. "Based on the simple metric of an industry size to 'cover' current sales, I calculate the national vineyard could be around 16% smaller."