By Andrew Starke

Foster’s Group CEO Ian Johnston yesterday (Aug 25) announced a small rise in earnings with its Carlton & United Breweries beer division the standout performer.

Foster’s international wine business struggled in the face of the global financial crisis with a slump in sales of major brands like Beringer and Wolf Blass in the US.

The country’s biggest brewer and the world’s second-largest wine company reported a four percent rise in annual net profit – to $741.5 million for the 12 months to June.

However, it posted substantial write-downs and restructuring charges on its wine business for the second straight year, which reduced annual profit to $438.3 million.

The company has been restructuring its beer and wine businesses into separate units after its ‘multi-beverage’ strategy failed.

Foster’s decided in February to try and improve its wine division rather than sell it in a weak market.

"In the six months since announcing a major transformation program, Foster’s has put in place a new strategy; a new company structure; and is embedding a new culture across the business,” Johnston said. "Organisational renewal is accelerating with new operational leadership in the Americas, Australasian wine and Carlton & United Breweries. This year’s result includes $21 million of efficiency benefits and Foster’s remains on-track to deliver $100 million of benefits in 2011.”

He singled out the domestic beer market, praising the resilience of Foster’s brands over a challenging period.

"The Australian beer, cider and spirits business, now known as Carlton & United Breweries, returned an excellent result,” Johnston said. "Australian beer volumes were up in a good domestic market and we continue to leverage our leading innovation program for strong earnings growth.”

Shares in Foster’s were trading at $5.45 at midday today (Aug 26), up from $5.35 seven days ago.

TheShout will analyse the performance of Foster’s individual brands on Friday.

The Shout Team

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

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