Foster’s has insisted that its wine division remains profitable, despite being hit by the economic downturn.
The Australian company, which produces Penfolds, Lindemans and Rosemount wines, has delivered an annual net profit of A$741.5 million, lower than had been forecast but up 4% on the previous year.
Foster’s said the global recession had hit wine earnings, and led to lower inventory levels among its customers, and warned that the outlook for wine sales remained tough.
But the company reported a strong performance for its beer division, which will inevitably increase pressure from the financial sector to find a buyer for the wine operation.
Chief executive Ian Johnston said Foster’s was reaping the rewards of its “major transformation programme”.
He added: "This year's result includes $21 million of efficiency benefits and Foster's remains on track to deliver $100 million of benefits in 2011.
“Wine Review related initiatives are on track and there is an extraordinary amount of activity underway. However the wine category is bearing the full brunt of a lack of consumer confidence brought on by global economic conditions.
“Wine returns are not where we want them to be, but it remains a profitable business, producing exceptional quality wines and continues to generate solid cash flows.
“Overall, our brands are in very good shape, holding their own in a tough consumer environment.”