Foster's Group has responded to a suggestion from investment bank Merrill Lynch that it should split its beer and wine operations by saying it had no intention to do so but would keep all options "under review".

The response from chairman Frank Swan today (31 October) followed a report by Merrill Lynch which called on the group to split its wine and beer operations because of the underperformance of its wine division.

"The board and the management team clearly keep all of these options and issues under review, but we have no intention at the present time of moving to separate the two businesses," Swan said. "And neither do we believe that it's in the best interests of the shareholders that we should do so."

In its note, Merrill Lynch had said: "Our view is that Foster's needs to break itself up to avoid further loss in shareholder value. And although the value of the break-up may not differ significantly from the current share price, it would prevent further capital being lost in the future."

The bank added that its "sell" recommendation on the stock was based on Foster's Group's decision to buy Southcorp.