AUS: Foster's hands wine brands to Vok Beverages JV
Foster's Group has signed a deal to offload 13 wine brands to a joint venture with Vok Beverages Pty, as part of the Australian group's strategy to streamline its troubled wine business.
Under the deal, announced today (23 October), Vok Beverages will handle sales, marketing and general management of the 13 wine brands from 1 December.
Foster's, which is to form a 50-50 joint venture with Vok, will continue to produce the wine.
"This substantially completes the rationalisation of the Australian wine tail brands announced as part of the Wine Strategic Review outcomes in February," said David Dearie, managing director of Foster's wine divisions in Australia and New Zealand.
"This joint venture allows Foster's to focus on winemaking, distribution and marketing of its core portfolio. The joint venture enables Vok Beverages to capture new opportunities for these brands as part of a smaller, more focussed offering."
The brands to be transferred to the joint venture are Queen Adelaide, Half Mile Creek, Minchinbury, Matthew Lang, Andrew Garrett, Maglieri of McLaren Vale, Rouge Homme, Great Western, Cartwheel, Fishers Circle, Galway Pipe, Boronia and Yarra Ridge.
Earlier this week, Foster's CEO Ian Johnston bemoaned the consumer trend to "eat out less and trade down to cheaper wines" as holding the company back in the last 12 months.
After the group's full-year results, published in August, Johnston said: "Wine returns are not where we want them to be, but it remains a profitable business, producing exceptional quality wines and continues to generate solid cash flows."
Speculation has continued to swirl that Foster's may look to sell its entire wine arm, which also includes brands such as Rosemount, Lindemans and Penfolds. The firm has separated its wine arm from beer, cider and spirits operations, following publication of its wine business review in February.
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