Foster’s circled by buyers
Among those slated to participate in an auction for Foster’s beer unit are SABMiller, Molson Coors, Asahi and Coca-Cola Amatil (CCA). CCA, in 2006, set up a joint-venture beer business in Australia with global brewer SABMiller called Pacific Beverages.
Although it is still early days as sales procedures will not start before next year, media have already hotly pursued industry leaders for comments. When Terry Davis, Managing Director of CCA, was asked on 28 July 2010 if he were interested in Foster’s, he quenched expectations, saying that the estimated price for Foster’s was not right for CCA to be involved. But he added: “That’s not to say that if the business got sold, that we wouldn’t look at some of the assets within that business. Who knows?”
On the future of Foster’s wine business, which could fetch AUD 2.1 billion if sold, he remarked that the global wine sector had experienced structural issues since at least 2002 and that wine consumers were not drinking as much as they used to.
Mr Davis expressed his belief that there was still a future for the wine industry in Australia, but that it may not lie in corporate hands.
Mr Davis is no stranger to the wine industry, having worked as Managing Director of Foster’s-owned Beringer Blass Wines, before joining CCA in 2001. Obviously, he knows what he is talking about because he allowed himself a comment on Foster’s problems: “Where people have really struggled is where they’ve had a multitude of brands at a multitude of price-points, and had the difficulty of managing them.”
Whereas the jury is still out over the future of Foster’s wine business, pundits think that the fate of Foster’s AUD 12.5 billion Australian beer business is sealed and that it will be sold to the highest bidder.
Japan-based Asahi Breweries intimated on 3 August 2010 that it was keen on increasing its involvement in Australia. “I wouldn’t say we have no interest (in Foster’s)”, Asahi’s President Naoki Izumiya said in an interview.
In addition, rumours are circulating regarding another Japanese or Chinese bidder for both Foster’s wine and beer businesses.
Foster’s will release its financial results for the year ended 30 June 2010 on 24 August 2010.
