Blog: Foster's Millions
Chris Brook-Carter | 18 August 2003
Everyone but Foster's seems to be voicing an opinion and if the company's boss Ted Kunkel is following the press he will have been bombarded now by countless whys, wheres and hows.
The primary division in opinion though is whether to expand his wine empire or not. If not then the options reduce significantly and we may see the company invest in a share buyback, debt reduction or capital return to shareholders.
But frankly that all seems a bit dull. Quite apart from the selfish reasoning that debt reduction just doesn't make good editorial, I can't get my head round the idea that a company of Foster's international scale and ambition would go to all the trouble of selling off such a significant part of its business not to build a war chest for acquisitions.
And neither does the idea that wine does not represent a good investment cut much sway for me. Certainly the industry is under more pressure now than at any time in the last decade, but its long term potential still remains real. Wine is a long term business - a notion lost on investors and analysts all too often - prone to short term fluctuations in fortune. But I can't imagine too many of BRL Hardy's initial investors complaining about the ROI prospects of a well run wine business.
So just to add to the stream of predictions, my money is sitting on a US wine acquisition, perhaps Brown-Forman's wine division or Kendall-Jackson. The other option is Southcorp, but the Oatley family involvement makes any deal more complicate than either of the above, while the domestic market holds none of the potential of the US.
We had some technical problems with the just-drinks site yesterday....
No self-respecting rapper is without some affiliation to a booze brand. Vodka is de rigueur, thanks to P Diddy and his tie-up with Diageo and Ciroc. ...
Is this the true breakfast of champions?...
We are well served in the drinks industry by quality advertising campaigns....
- Are we about to see a no-alcohol Heineken?
- American whiskey does a vodka - Analysis
- Battle continues for Pernod Ricard in US and China
- A-B InBev's Global Presence - just The Facts
- Concha y Toro's H1 performance - Focus
- Heineken integrates cider and beer
- “New normal” sees Pernod target premium in China
- Diageo strengthens Charmer Sunbelt distribution
- The Glenlivet leapfrogs Glenfiddich
- Pernod Ricard keen to stem Absolut US declines
- Future growth opportunities for global spirits
- Global gin insights - market data, product innovation and consumer trends research
- Global rum insights - market forecasts, product innovation and consumer trends research
- Pernod Ricard SA - Mergers & Acquisitions (M&A), Partnerships & Alliances and Investment Report
- Brown-Forman Corporation (BFB) - Financial and Strategic SWOT Analysis Review