By Andrew Starke

Beer division, CUB, was the main highlight of Foster’s results released yesterday (Feb 16), with first-half profits at their lowest in four years.

Profit for the six months to the end of December fell by 13.5 percent to $363 million, driven down by a strong Australian dollar and decreased wine sales in recession-hit Europe and America.

While analysts had predicted the fall in wine earnings, many were surprised by the Melbourne-based brewer’s flat beer sales.

CUB recorded a 4.7 percent gain in sales revenue but this was tempered by a 1.1 percent decline in the company’s volume share of the Australian beer market.

This market is believed to be growing at between one and three percent overall.

In particular, major brands like Victoria Bitter have suffered from consumers taste for premium beers although some of these have migrated to other CUB products like Pure Blonde, Corona and even cider.

Foster’s also lost market share in the lead-up to the festive season by not discounting its beer as much as some competitors.

“CUB’s beer portfolio remains Australia’s clear leader, with powerful brands driving strong sales growth,” Foster’s Group CEO, Ian Johnston, said.

“Over the past six months we have finalised the appointment of the new senior leadership team in the wine business and we were very pleased to announce the recent appointment of John Pollaers to lead Carlton & United Breweries.”

Johnston added that Foster’s new management team and regenerated board, combined with the brewer’s dominant stable of brands, gave him confidence that this result could be turned around over the next 12 months.

However the market was less forgiving with Foster’s shares falling to $5.49 at midday today, down from $5.55 seven days ago.

The Shout Team

The leading online news service for Australia's beer, wine, spirits and hospitality industries.

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