Minor hurdle in the path to demerger

FOSTER'S has hit a minor hurdle in its path to this month's historic $11 billion demerger after a proposed non-executive director for the spun-off wine business, Treasury Wine Estates, was forced to reject the board seat due to possible conflicts with US alcohol laws.

Foster's said in a statement to the Australian Securities Exchange that it would not be able to proceed with the appointment of Peter Hearl to the board of the wine business as detailed in the demerger proposal sent to shareholders.

''Mr Hearl has informed Foster's that he has recently become aware that his personal business interests in some states of the US could prejudice Treasury Wine Estates' licence under US legislation regulating the sale of alcohol.''

The company said it was working with Mr Hearl to enable him to reorganise his business affairs so that he might join the Treasury Wine Estates board after the implementation of the demerger, assuming it is supported by shareholders at a meeting slated for April 29.