Foster's CEO Trevor O'Hoy today said the Australian beer and wine company was on track to meet its full year earnings guidance for 2006 after a first quarter performance that was "on plan".

Speaking at today's annual general meeting, O'Hoy said the company was expected to meet guidance given in August for a 10% growth in normalised earnings this year.

However, he added that the Australian wine industry was expected to stay challenging for the next 12-18 months due to competition caused by the grape over-supply. That said, O'Hoy added that Foster's would benefit from growing fewer of its own grapes and instead buying them on the spot market.

He added that the company now exports up to 75% of its Australian wines, which would not be subject to the pressures of the local market.

O'Hoy added that Foster's plans to integrate its recently acquired Southcorp business were all on track or ahead of plan.