Foster's wine, beer split unlikely

Beverage giant Foster's Group is unlikely to split its wine and beer businesses into two separate companies or sell off its underperforming wine assets in the near future, according to The Australian Financial Review.

But the report says Foster's new chief executive, Ian Johnston, is likely to undertake a restructure the company, paving the way for substantial asset sales in the future.

Foster's will release the outcome of its 10-month wine review on February 17, as well as its half-year results, expected to be a $412 million net profit.

Foster's foray into the wine business was culminated in the $3.7 billion takeover of Southcorp - behind the Penfolds, Lindemans and Wynns labels - in 2005. Analysts say combining wine and beer costs the company $100 million per year, but it's believed the company is reluctant to sell assets in the current market.

Further writedowns are possible, with Goldman Sachs JBWere predicting the extra writedowns could reach $700 million, the paper says.