Foster's scraps sale option for wine unit: report

Australian brewer Foster's Group Ltd has shelved the option of selling its wine business because of global market conditions, a lack of buyers and the prospect of a big loss of shareholder value, the Australian Financial Review reported on Tuesday.

Without citing sources, the daily said Foster's might still spin off the unit to its own shareholders or sell lower-end wine brands and reposition the business as a seller of premium wines.

Australia's largest brewer is due to decide early next year on what to do with the wine unit, which ranks globally behind Constellation Brands Inc (STZ.N: Quote, Profile, Research, Stock Buzz) and whose brands include Rosemount and Penfolds.

The Foster's wine business, valued by analysts at around A$5 billion ($3.4 billion), has seen a fall in sales, dragging down overall group profit.

Last week, North American brewer Molson Coors Brewing Co (TAP.N: Quote, Profile, Research, Stock Buzz) TAP.TO emerged as holder of a 5 percent interest in Foster's, sparking talk of a takeover bid.

($1=A$1.49)