Australian brewer Foster’s Group is to separate from its struggling wine division.

The split is expected to take place during the first half of next year – leading to speculation that the beer business could attract bids from the likes of SAB Miller and Molson Coors.

Foster’s moved into wine in 1996 with a swoop for Australian brand Mildara Blass and has spent billions on a series of acquisitions.

The division is currently the second-largest wine business in the world after Constellation Brands but sales have tumbled in recent months.

Investors welcomed the move, with shares in the drinks group rising by more than 6% following the announcement.

"We are increasingly seeing the benefits of operationally separating the beer and wine businesses," said Foster's Group chief executive Ian Johnston.

“The beer business is Australia’s market leader and, under new leadership, is focused on reinvesting in its key brands to continue its track record of positive earnings growth.

“Foster’s wine business is showing signs of growth but continues to be impacted by oversupply in Australia, subdued consumer demand in key international markets and a strong Australian dollar.”

Read more
‘Kamikaze’ 24-pack booze deals blasted by suppliers (1 May 2010)
Focus On Wine & Champagne (24 April 2010)
Party spirit tempered as flat beer sales hit festive trading (30 January 2010)