Blog: Economy fosters attitude to wine
Olly Wehring | 24 February 2009
Months of feverish speculation were brought to an end last week as Foster's informed the world that it would, after all, hang on to its wine business.
Well, at least, that's partially true. In fact, Foster's plans to shave significant amounts of fat off its wine arm, with 37 brands and more than 30 "non-core vineyards" heading for the chop. And, while speculation about a sell-off was hushed , it was far from silenced.
Foster's chairman David Crawford, who led the strategic review on the wine business, quite openly admitted that "a poor financial climate" means it is "not the appropriate time to sell". The wine division is also to be "structurally separated" from beer and spirits.
So, perhaps the door is not entirely closed. A streamlined wine business, including the Penfolds and Lindemans brands, would likely be a more attractive proposition.
The firm's move may yet also prove a blueprint for the entire Australian wine industry, which is facing tough choices on how to marry supply and demand going forward.
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