Californian wine hits Foster’s profits

Foster’s has posted a 9.4% decline in second half profits as its Californian wine business struggles to perform in a highly competitive marketplace. However the decline was not as significant as analysts had feared thanks to a rallying performance from the company’s Australasian beer business, which saw value sales rise 5.8% in spite of 2.1% volume decline.

Foster’s second half profits fell to A$319.7 million (£148.8m), down from A$353m last year. However, this performance was better than the forecast anticipated by Reuters, which was A$310.9m. In June the company announced that it will be reviewing its wine business.

Commenting on the decline, acting chief executive Ian Johnston (who has been in position since chief exec Trevor O’Hoy stood down in June) said: “We are making good progress with our wine review but won’t be commenting on our analysis or conclusions until the review is completed.”

Ben Grant, 27/08/08