Foster's may have to stick with wine

The global credit crunch may force Foster’s to abandon any hopes to offload its wine division in 2009, analysts say.

The Penfolds, Rosemount and Lindemans producer is considering its options for its wine interests, admitting that it paid too much for some of its assets. Sales have also been affected by the economic slowdown, creating pressure on Foster’s to concentrate on its brewing operations.

Foster’s has said it will make a decision on the future of its wine division by mid-February, when it announces its half-year results, and there is growing speculation that it will stop short of a complete divestment of its wineries.

Theo Maas, investment analyst at Fortis Investment Partners, told Reuters: “In this type of market it’s going to be very difficult to do anything. My guess is we’ll get an internal restructure story.”

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