Foster's to split wine and beer groups

Australia's largest brewer, Foster's Group intends to split its wine and beer arms into separate businesses next year.

Foster's spent nearly $A7 billion expanding into wine to counter flat beer demand, but earnings have slumped due to a production glut driving down prices and a strong Australian dollar.

The company says the split will result in $A100 million in annual savings from 2011.

Analysts say Molson Coors, which owns a 5% stake in Foster's, could also make a bid for Foster's beer business, perhaps jointly with a larger brewer.

They say any sale of Foster's wine business, which is the world's second largest after Constellation Brands, may depend on the consolidation in the global wine industry.