Fosters pleases with sale progress

Foster's pleases with sale progress

Foster's Group has decided that three vineyards and a winery put up for sale following the firm's wine division review may have a viable future after all.

Foster's confirmed to just-drinks today (21 June) that it has withdrawn the Guthrie's and Schultz vineyards in South Australia and the Meridian vineyard in California from a list of non-core wine assets to be sold off.

It has also decided to retain Baileys of Glenrowan winery in Victoria, Australia.

The three vineyards represent 12% of the 5,000 hectares of vineyard area that Foster's has been seeking to sell in order to prune and revitalise its wine business.

Foster's indicated that its decision to shorten the sales list reflects a more upbeat mood on the performance of its wine arm.

A Foster's spokesperson told just-drinks that the move "follows recent innovations and [is] based on future sales planning".

He added that the sale of non-core wine assets has been progressing well: "Since we announced the vineyard divestment programme in February 2009, we’ve sold 23 properties in Australia and the US. We will continue to seek buyers for the remaining ten properties in the coming months."

Foster's announced last month that it would fully demerge its wine and beer businesses, a move that has prompted speculation about takeover bids for both divisions, particularly the beer arm.

The firm faces a further AUD1bn (US$829.1m) non-cash charge on its wine assets in the current fiscal year, reflecting an anticipated re-evaluation of the assets during the demerger process. Write-downs following poor performances on the US wine market have dogged Foster's earnings over the past couple of years.

For in-depth coverage of the Foster's demerger, click here.