Australian wine and brewing group Foster's is on the brink of another winery acquisition, T'Gallant, based on the Mornington Peninsula near Melbourne, according to industry reports.

Fosters, whose spokesman said the company did not comment on speculation is reported to be conducting due diligence inquiries into a deal.

T'Gallant is a small premium producer with sales of around 50,000 cases a year and the acquisition would be in line with Foster's announced strategy of seeking bolt-on acquisitions to add to the brands in its Beringer Blass wine division.

However, observers now believe it is unlikely that Foster's will make a bid for the troubled market leader, Southcorp.

Although Southcorp's presence in Europe would be seen as attractive to Foster's, which has been tipped by some analysts as a possible bidder, the company is thought by other observers to be unwilling to meet the high price necessary to secure the Oatley family's strategic stake in the company.