By Andrew Starke

Foster’s Group has announced plans to transfer 13 of its Australian wine brands to a joint venture with Vok Beverages.

The industry had widely expected the brewing giant to restructure its operations after undertaking a Wine Strategic Review in February and with indifferent wine results taking the gloss off increased beer sales in its annual report released in August.

Vok Beverages will assume responsibility for the marketing, sales and management of the brands from 1 December 2009.

The brands to be transferred to the joint venture are Queen Adelaide, Half Mile Creek, Minchinbury, Matthew Lang, Andrew Garrett, Maglieri of McLaren Vale, Rouge Homme, Great Western, Cartwheel, Fishers Circle, Galway Pipe, Boronia and Yarra Ridge.

Foster’s will continue to produce wine for the joint venture, with none of the 13 considered part of the company’s core wine portfolio.

In a statement released to the Australian Securities Exchange today (Oct 23), Foster’s said it would hold a 50 percent interest in the joint venture company and will adopt the equity method to account for the investment.

The formation of the joint venture is not expected to have a material impact on Foster’s.

“This substantially completes the rationalisation of the Australian wine tail brands announced as part of the Wine Strategic Review outcomes in February”, said Foster’s Wine Australia and New Zealand managing director David Dearie.

“This joint venture allows Foster’s to focus on wine making, distribution and marketing of its core portfolio,” he said. “The joint venture enables Vok Beverages to capture new opportunities for these brands as part of a smaller, more focussed offering.”

Foster’s last week announced the sale of eight vineyards as part of its wine asset disposal program.

Totaling 531 hectares, all eight properties are located in South Australian, and include Blewitt Springs and Tamar in McLaren Vale, Gales and Tolleys in Padthaway, and Partalunga at Mount Pleasant.

Shares in Foster’s were trading at $5.54 at midday today (Oct 23), up from $5.50 seven days ago.

The Shout Team

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

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