Foster’s is having a good season under – relatively – new CEO
Mr Johnston blamed mistakes by his predecessors Ted Kunkel and Trevor O’Hoy, who paid too much for Beringer Wine Estates and Southcorp respectively, and ill-fated attempts to combine beer, wine and spirits marketing operations for much of the malaise.
In an effort to clear Foster’s wine portfolio from underperforming brands, Foster’s will transfer the management and marketing of 13 wine brands to a joint venture with Vok Beverages Pty Ltd, a subsidiary of Bickford’s Australia , a privately-owned producer of non-alcoholic beverages. The transfer will take place before the end of the year.
Foster’s will continue to produce the brands for the 50:50 joint company. Brands to be transferred include Boronia, Galway Pipe, Great Western, Maglieri, Matthew Lang, Minchinbury, Queen Adelaide, Rouge Homme and Yarra Ridge.
Angelo Kotses, Bickford’s sole owner and Managing Director, said that the deal continues a business model already established with drinks group Diageo under which Vok markets and distributes a variety of spirits, including Beenleigh Rum, Vickers Gin & JB Whisky. Mr Kotses hopes to take Foster’s wine brands from decline to stability and then to long-term growth.
Foster’s employees working for the 13 brands above now know at least that they are not considered “core” any more.
Mr Johnson, well-aware of the growing displeasure among his staff, publically admitted that the sweeping reorganisation of the company’s structure undertaken in recent months was not universally popular. About 300 jobs have been axed so far and his AUD 50 limit (EUR 31) for retirement functions didn’t improve the mood.
However, Mr Johnston has increased sales personnel by 25 percent and introduced a charter of “Three As” (“accountable, adaptable and aggressive”), urging staff to focus on the brands that matter.
Analysts nevertheless expect that eventually Foster’s will be split into beer and wine, with both listed separately on the Australian Stock Exchange.
For the summer 2009/10 (that’s winter in the northern hemisphere) Foster’s is planning a busy sales campaign for niche brands and premium imports as well as for the whole portfolio of beers.
