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Australian Foster's Beer Sales weaken

The Australian beer market may be in growth but volumes for the Foster’s Group went in the other direction in the firm’s financial first half as the giant registered an 11.7% slump in net profit.

Beer volumes dipped 1.1% against overall Australian market growth estimated at 1%. The group, Australia’s largest brewer, lost market share during the period but said the separation of its beer and wine businesses was on track to deliver cost savings of A$100 million next year.

“The cultural change occurring is marked and sets the foundation for Foster’s as a leaner, more effective market competitor,” said group chief executive Ian Johnston in a statement.

“We are delivering on our commitments, with the separation of our wine and beer sales force; rationalisation of our non-core wine tail brands; sale of non-essential vineyards and delivery of cost savings to plan.”

Despite the difficulties, the group said that Foster’s beer-making division Carlton and United Breweries’ (CUB) portfolio remained the clear leader in Australia, with innovative new brands such as Pure Blonde Naked Ale and Big Helga tapping into Australians’ growing desire for different beer experiences.

The restructuring of Foster’s wine business, including the Wolf Blass, Penfolds and Beringer brands, began last year, sparking speculation that the group was looking to sell up its wine operations. Earnings from wine fell by nearly a quarter, impacted by what the firm termed “currency and economic conditions”.

Johnston said the appointment of John Pollears as CUB chief executive, following the departure of Alex Stevens due to ill health in December, puts the business in good stead for the future, with Carlton Draught now Australia’s number-two beer and the VB, Corona, Crown and Pure Blonde brands leading their categories. Last week Foster’s extended its 22-year licensing deal with Corona brand-owner Grupo Modelo. The group claims Corona is Australia’s biggest selling premium imported beer and the seventh largest beer brand in the country.
By Rob Brown
Based on the following sources:
http://www.brewersguardian.com