By Ian Neubauer
An announcement by Foster’s of an extension of its 19-year-long contact to exclusively distribute cash cow beer brand Corona Extra in Australia flew in the face of a $15m dent for costs associated with the restructuring of the company’s warehouse assets and a 10 per cent fall in the value of its stock over the last 12 months.
Branded the Australian Logistics Transformation Project, the restructure was part of Foster’s multi-beverages strategy in which warehousing requirements were amalgamated into one large facility in four capital cities. New warehouses are now operational at Forrestfield in Perth, Wingfield in Adelaide, Rosehill in Sydney and Truganina in Melbourne, with another facility scheduled to open in Brisbane in March.
A report today in The Australian Financial Review also said Foster’s was “preparing to take a $34m one-off hit to its bottom line after the closure last year of the Matilda Bay brewery in Fremantle”. Following 17 years of local beer production, Foster’s announced the closure of the WA plant in June last year. The move cost the company $13m in redundancy payouts and a further $21m in pre-tax costs related to the closure of the plant.
But Foster’s corporate affairs spokesman, Troy Hey, said the report was incorrect. “We have already expensed that in the 2007 financial year,” he said.
Foster’s shares, which hit a 52-week high of $7.25 last year, opened today at $5.83. Eight per cent had been wiped off the price of the company’s share price earlier this week, contributing to an average 10 per cent downgrade over the past 12 months.