Saved by beer

Foster’s Group has warned it could take up to two years to deliver a lasting improvement in performance, after announcing an almost fourfold jump in net annual profit from AUD 111.7 million (2008) to AUD 438.3 million.

The drinks group, which in February officially dumped its multi-beverage strategy of having one sales representative sell beer, wine and spirits, benefited from a sound Australian beer market.

The beer, cider and spirits business in Australia and Asia-Pacific improved net sales revenue by 5.3 percent, and lifted operating profit by 4.8 percent from AUD 766.1 million to AUD 803.2 million.

Australian beer volumes were also up, helped by a massive tax hike on alcopops. Thus the government hopes to protect younger consumers from the evil effect of drink.

As concerns Foster’s wine divestures: Of the 37 brands targeted in the wine review, 17 were to be deleted; there had been one divestment, a sale was under way for six, and an exit strategy for the remaining 13 was to be implemented in the next six months.

Apparently, investors were more than underwhelmed by Foster’s full year results. Foster’s shares closed unchanged on the day.