Small beer to premium importer

By SIMON HENDERY liquor writer

In the 1990s Foster's International New Zealand was a small beer importer, arguably in the business of annoying its Australian head office's nemesis, Lion Nathan, on Lion's traditional home patch.

But when Foster's Group president and chief executive Ted Kunkel visits New Zealand these days he can talk about the local operation's growth spurt in beer, wines and spirits, and its focus on premium brands.

"This [New Zealand operation] - probably more than anywhere else - reflects one group of people who are handling all those premium brands together," Kunkel said in Auckland this week.

The local operation is of particular interest to New Zealander Kunkel, a former Selwyn College head prefect and Auckland University graduate who joined Foster's as an assistant brewer in 1968.

Recently renamed Foster's Group NZ, the company's local operation is forecast to contribute $15 million in operating earnings this year, from $25 million in capital employed - a "fantastic return", Kunkel says, and one of the international group's best performing units, "albeit off a small base".

Rick Sculley, the managing director of Foster's Brewing International, who was also in Auckland this week, said since a revamp of the New Zealand operations in 2000 the company had managed to reposition its three main beer labels Foster's, Victoria Bitter and Crown Lager as "imported brands".

While Foster's had effectively left the high-volume mainstream beer market to Lion and DB Breweries, sales of its three main brands were growing at double-digit rates, Sculley said.

On the wine front, the company owns winemaker Matua Valley, and added Marlborough's Ponder Estate to its portfolio last year.

Global sales of Matua rose 39 per cent in the half year to the end of December and were forecast to rise 89 per cent during the full year, Kunkel said.

While its New Zealand offerings were just a drop compared with its Australian and US wine assets Kunkel said Matua was a significant international brand within its portfolio and "we keep our eyes open all the time".

On speculation that Foster's might be interested in acquiring troubled Australian wine giant Southcorp, Kunkel said the company had nothing to tell the market.