Foster's sells wineries to focus efficiency

The Seppeltsfield estate is one of several wineries Foster's is selling. Picture / South Australian Tourism

Foster's Group, the world's second-largest winemaker, will sell one winery in France, two in Australia and some of its smaller brands as it centralises production at its most efficient plants.

Foster's will sell its Denman and Seppeltsfield wineries in Australia and the Domaine La Motte facility in France, the Melbourne-based company said yesterday.

Foster's will also sell the Seppeltsfield fortified wine brand and consider offers for the James Herrick label it makes in France. The sales further chief executive Trevor O'Hoy's plan to sell assets to lower costs and repay debt as he tries to integrate last year's A$3.2 billion ($3.9 billion) acquisition of Southcorp, Australia's No 2 winemaker.

O'Hoy's focus on domestic brewing and international winemaking brands has already led him to sell the Foster's label in Europe as well as the company's breweries in China.

Any sale of Denman will be linked with contracts to supply wines for the Rosemount brands made at the winery, which is about 200km north of Sydney.

Seppeltsfield, which was established in 1851, is a 185ha property in the Barossa Valley of South Australia.

The site's cellars hold about 9 million litres of fortified wine.

At the company's Nuriootpa site in the Barossa Valley, Foster's plans to sell its white wine and packaging plant. The company will keep the red wine centre, where it makes Penfolds wines including Grange and St Henri.

Foster's shares rose 8c to A$5.45 at the 4.15pm market close in Sydney, paring this year's decline to 2.3 per cent.

The stock has had one annual gain since 2001.

- BLOOMBERG