Foster's dusts off premium wine label

WEEKS after announcing write-downs of up to $700 million on the value of its global wine business, Foster's is resuscitating a forgotten Tasmanian wine label as it seeks to rebuild momentum in the restaurant market.

The launch of a new top-shelf brand is a rarity at Foster's, which is seeking to consolidate its portfolio of more than 50 wine brands and comes as chairman David Crawford embarks on a review of the wine business, which could result in asset sales.

Heemskerk, originally launched in 1975, enjoyed considerable success in the 1980s before being hived off into the Cellarmasters wine club business as an in-house brand available only to members.

Foster's sold the Cellarmasters business last year but retained the Heemskerk label, which group marketing manager for specialist brands Nicholas Crampton said would be restricted to restaurants and fine wine retailers.

"It's the same strategy used by most of the top boutiques ... it's one Foster's hasn't used as aggressively before," he said.

The ubiquity of Foster's brands, including Penfolds, Lindemans, Wolf Blass and Rosemount, in retail outlets has been their downfall in on-premise sales, with few restaurant diners willing to shell out $50 or more for a bottle of wine they know they can buy for less than half that price at Dan Murphy's. Foster's also lost restaurant customers after the 2005 acquisition of Southcorp by attempting to sell both beer and wine through a single sales team, alienating high-end clients accustomed to more specialised service.

The strategy has since been abandoned.

Mr Crampton said 95 per cent of Heemskerk wines, which were priced at up to $60 a bottle, would be sold through restaurants.

"As long as we control the volume we sell, as all boutiques do, you won't see it advertised aggressively by retailers," he said.

Foster's has successfully moved its Coldstream Hills and St Hubert's brands from Victoria's Yarra Valley to a similar model over the past two years.

In addition to Heemskerk, Foster's plans to introduce its Italian brand Castello de Gabbiano into the Australian market this year to address a lack of imported brands in the portfolio.

Mr Crampton said the addition of new products was being balanced by the deletion of 20 other wine products, including the Glass Mountain and Blues Point brands, which would be warehoused.

Heemskerk wines are produced from grapes bought from third-party growers and processed at a contract facility in Tasmania before being transported to existing Foster's wineries in Victoria and South Australia for maturation and bottling.

Mr Crampton said he believed the brand would be safe from any cutbacks instituted by the chairman's review of the wine business. "It's extremely capital efficient, so we expect that any review will look very favourably on the Heemskerk model and the Heemskerk concept," he said.

Foster's entered the wine market in 2000 with the $2.6 billion acquisition of US wine group Beringer, following it five years later with the $3.2 billion purchase of Penfolds' parent company, Southcorp.