Review reveals new road for Fosters
Following the announcement that Foster’s Group would be selling off its wines interests and rumours of potential employee cuts after a small number of Melbourne staff were laid off, the drinks company has declared the death of its multi-beverage strategy, but shied away from plans to split the company in two.
A report in The Age says the drinks company yesterday released the results of a 10-month review of its wine business, announcing changes that will mean the loss of more than 400 jobs and annual savings of $100 million within three years.
It will sell or close down 37 low-selling Australian wine brands and 36 vineyards across Australia and its US interests, primarily California.
After the review, the company has flagged write-downs to its assets and restructuring charges totalling between $330 million and $415 million.
It will also launch a campaign to reduce costs in overheads, procurement and manufacturing.
Foster’s has decided to undo its multi-beverage strategy, which involved the same sales force selling beer and wine, with those functions now being split.
“The current conditions in debt and equity markets mean this is not the appropriate time to sell or demerge Foster’s wine business,” asserts chairman, David Crawford.
The organisational restructure will separate the Australian wine operations from Fosters beer, cider and spirits division.