The chairman of Foster's Group Ltd, Frank Swan, has told the company's shareholders he expects China to represent a significant opportunity for its wine brands in the coming years.

Foster's beer operation in China, based at its brewery in Shanghai, is relatively small, and Swan, speaking at the group's Annual General Meeting, conceded that the beer market in China remained extremely competitive. But he added that he expected China to become a significant market for the group's wine brands.

Following its A$3.2bn takeover of Southcorp earlier this year, Foster's is now the second largest wine group in the world after Constellation Brands.

Swan said: "The view the board and the management take is that while we're not making a significant profit out of China it is a good place to be to keep tabs on what's happening in the beer market and in fact not only the beer market - going forward China will be a significant market for our wine brands."

While Swan conceded that the Chinese beer market was competitive, chief executive, Trevor O'Hoy, added that the Shanghai brewery was close to break-even.

"Clearly, the concentration within Asia will be the more developed markets like Japan but, quite clearly, we will not turn our back on something as big as China," O'Hoy said.