Preparing For Split, Foster’s Renames Global Wine Unit

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Christina Jelski
Posted: July 21, 2010

In order to demerge its wine and beer divisions, Australia-based Foster’s Group has renamed its global wine unit Treasury Wine Estates. The move is part of the company’s “Transformation Agenda,” which has split the two businesses into autonomous units with separate boards, management teams and stock exchange listings. The demerger announcement, made last May, resulted in rising stock shares, helping to boost Foster’s struggling wine unit. The separation is expected to make the company’s wine and beer businesses more appealing takeover targets.

Treasury Wine Estates has 4,000 employees globally and includes roughly 12,000 hectares (30,000 acres) of vineyards, 20 wineries and 50 wine brands throughout Australia, California, France, Italy and New Zealand. Foster’s wine business is the sixth-largest in the world by volume, selling nearly 40 million nine-liter cases annually. The company reported a 4.4% net sales drop and a 13.5% net profit decline in the six months through December 2009. Foreign exchange rates contributed to a 76% sales drop in European, Middle Eastern and African markets, but even at constant currency, Foster’s American wine sales fell 45%.

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