Fosters Groups Treasury Wine Estates still struggling in US

Foster's Group's Treasury Wine Estates still struggling in US

Foster's Group has continued to underperform on the US wine market during the key holiday period, according to figures from ACNeilsen.

Foster's US wine sales fell by 9.4% in value in December, compared to a 3.6% rise in total wine sales in US retail channels monitored by Nielsen.

Foster's wine arm, Treasury Wine Estates, saw US volumes drop by 5.2% against December 2009, versus an industry increase of 3.3%.

December is the eighth consecutive month in which Foster's has underperformed the US wine market in both value and volume. Nielsen's figures suggest that the group's wine business has remained under pressure in the first half of Foster's fiscal year.

The Rosemount and Penfolds producer warned in October that its performance as measured by Neilsen would worsen for several months as it gave up sales at low price points.

The Nielsen figures only account for around 25% of the US wine market and don’t include sales made via restaurants and more upmarket wine stores.

JPMorgan analyst Stuart Jackson said some of the underperformance could be attributed to a reduction in promotional pricing. US sales of every Foster's brand were down in December, excluding Stone Cellars, which surged by 96% by volume as its price was slashed by 25 per cent to US$3.91.

Meanwhile, US sales of Australian competitor Yellowtail fell by 2.7% in volume in December, despite a 3% fall in price to an average of $6.08 per bottle.