Kunkel says goodbye beer and wine

By SIMON HENDERY

Ted Kunkel returned the Herald's call at 7.40am Melbourne time yesterday as he drove into the office.

It has been a busy week for the Auckland-born-and-raised president and chief executive of Foster's Group.

On Monday he announced his impending departure from the helm of the Australian beer and wine giant.

On Tuesday Foster's released its half-year result. Kunkel spent Wednesday and Thursday out of town talking up the less-than-sparkling numbers to analysts and investors.

He says the meet-the-investors tours have been a pleasant part of his 12 years in the top job.

"I've enjoyed that [meeting with big investors] through the years because when Foster's was in bad shape in the early nineties they were the people who supported me to get it right," he says. "While the schedule is always draining, the intellectual sparring is quite good."

Kunkel stepped into his present role in 1992 when Foster's was technically insolvent. His turnaround strategy involved selling about A$5 billion in assets and paying off A$4 billion in debt.

"The big shareholders had to come on the journey with us. They had to understand the strategy in the early days as to how we were going to rebuild the group."

Kunkel says taking on the job in such daunting circumstances was not a decision he needed to dwell on.

He puts his resolve down to "absolute faith" in two aspects of the business at that time - mainstay brewing operation Carlton & United Breweries' ability to generate the cashflows to keep the group functioning, and the capabilities of its staff.

"I just was not prepared to see us go into liquidation without giving it a first-class red hot try at turning the company around."

Kunkel was born in Auckland, spent his childhood in Titirangi, Glen Innes and Ellerslie, and ended his school days as head prefect at Selwyn College.

"I don't know what that says about me," he chuckles down the cellphone.

"I'm one of those people who likes to guide other people. People talk about leadership where you run around, waive the flag, and yell and scream.

"That's not my style at all. I'd rather guide people, make sure they have the right skills for the job and then let them get on with it. I guess those leadership things go back to those early days."

After completing a science degree in chemistry and zoology at Auckland University, Kunkel stayed on in his home town spending a year working as a wine industry adviser for the Department of Agriculture.

He joined the Foster's empire in 1968 as an assistant brewer for CUB in Melbourne and spent the next 24 years working for the company around the world before assuming the chief executive role. Wine has remained a passion throughout his career and it is his push to turn Foster's into a global wine player through the A$2.9 billion acquisition in 2000 of California's Beringer Wine Estates that will be Kunkel's legacy - for better or for worse.

This week's half-year result was dragged down by the poor performance of the wine side of the business, which accounted for 45 per cent of Foster's A$2 billion in revenues from continuing operations.

But despite a grape glut and strong competition in the US market, Kunkel insists he will be proved right on the wine expansion strategy eventually. "The demographics for premium wine in established [Western, wine-drinking] countries are spot on."

The Foster's board expects to announce Kunkel's successor mid-year and he will step down before the end of the year.

And while "I've always continued to support the All Blacks" there is no plan to return permanently to the quiet life in his country of birth.

He will stay in Melbourne, remain a director of surfwear company Billabong, pick up one or two more directorships, consult, work on his golf, and indulge a passion for designing and building upmarket town houses.

CV: Ted Kunkel

Age: 60.

Born: Auckland.

Education: Bachelor of Science, Auckland University.

1967: Wine adviser, Department of Agriculture.

1968: Assistant brewer, Carlton & United Breweries, Melbourne.

1972: Production manager, CUB, Fiji.

1975-86: Various CUB roles in Australia.

1987: President and CEO, Carling O'Keefe Breweries, Canada.

1989: Executive chairman, Molson Breweries, Canada.

1992-present: President and CEO, Foster's Group.

Career highlight: "Turning $1 of equity which we took into Canada in 1987 into $800 million as we exited in 1992."