Speculation is growing that Foster's may attempt to hold fire on a sale of its wine assets, but analysts say the group needs to show that it is addressing its problems.

Foster's is set to announce the results of an eight-month strategic review of its struggling wine business tomorrow (Tuesday 17 February).

Several industry sources have told just-drinks in recent months that Foster's is expected to de-merge its wine and beer businesses in order to sell off under-performing wine assets.

The current financial environment may, however, persuade Foster's to hold on until conditions for a sale improve, analysts believe.

Ian Abbott, analyst at Goldman Sachs JBWere, the investment broker firm that is reported to have been advising Foster's, said in a note last week that Foster's intentions remain uncertain. But, he said, the review will need to address the firm's "overexposure to vineyard holdings, its long tail of mid-tier brands and a its poor return on assets".

Abbott added that Foster's may be forced to report another write-down charge on its wine business, possibly of up to A$700m (US$455.8m), in its first half results, also due out tomorrow. The drinks firm has not provided first half earnings guidance to the market.

Foster's, which owns the Penfolds and Rosemount brands, approached a number of potential suitors for its wine business in the second half of 2008, but met with a muted response, industry sources have told just-drinks.

The firm has maintained that "every option", including a cash sale of assets, remains on the table.

A poor performance from Foster's wine division led to a US$730m write-down charge for the 12 months to the end of June 2008, causing an 88% plunge in the firm's full-year profit.

Nielsen data released last month shows that Foster's outperformed wine rivals in the key US off-trade market in the final three months of 2008. The group's sales to US food stores rose by 5% during the period, suggesting volumes have remained firm in the first half.