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Foster's plans to keep wine unit but plans new Americas director
Last Modified: Monday, February 16, 2009 at 5:30 p.m.
NAPA, Feb. 16, 2009 -- Australia-based Foster's Group, which produces North Coast wines such as Beringer, Souverain and Chateau St. Jean, today said it won't get out of the wine business but will restructure the effort, including a split of the beer and wine operations and a new managing director for the Napa-based Americas unit.
As part of a report on financial performance in the first half of its fiscal year, Foster's announced that a review of its wine business undertaken in April 2008 concluded now wouldn't be a good time to sell the operations, given the current worldwide banking crisis, according to Chairman David Crawford.
"The performance of our wine business has been unsatisfactory," he said in the report. "In large part, this has been the product of poor execution in the Americas and pursuing a multibeverage model in Australia."
Today Foster's also announced it would soon replace its managing directors for wine operations in the Americas and Australia, including Scott Weiss, managing director of the Americas group. and part of the company since the acquisition of Southcorp in 2004.
Other changes to be implemented over the next 18 months at an estimated savings of A$100 million ($65 million) a year are the sale of 36 vineyards supplying lower-end wines, mainly in Australia and the Central Coast of California and an increase in the Americas sales staff.
The company is merging the Taz winery into the Meridian winery on the Central Coast and closing down the Denman winery in Australia. The shifting of wine production to the Asti winery in Sonoma County will continue to allow the St. Helena winery to focus on luxury-tier Beringer wines, according to Foster's Wine Estates Americas spokeswoman Allison Simpson.
About 300 positions are called "redundant" in the restructuring. Ms. Simpson said she didn't know how many, if any, positions would be from California operations.
Company earnings for the first half of the company's fiscal year rose 3.2 percent.
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