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Foster's looks to South America, South Africa
September 27, 2007
Richard Woodard
Wine giant Foster's is poised to source fruit from South America and South Africa if Australia's drought-stricken vineyards deliver another small crop in 2008.
After a drought- and frost-affected vintage this year, there are fears that Australia's 2008 harvest could drop below 1m tonnes – half the natural production level – leading to a shortage of wine for Foster's brands like Lindemans, Rosemount and Wolf Blass.
Foster's told an investors' presentation in Australia that, while it was too soon to call next year's harvest, the company had already developed contingency plans to ensure sufficient grape supply.
Chief supply officer Michael Brooks said: 'We've developed a competency to supply wine out of Chile and potentially out of Argentina, although we don't use that at this stage, and South Africa. So those sorts of sources would be brought into play if necessary.'
CEO Trevor O'Hoy added that the issue tapped into the group's likely long-term wine strategy. 'I would hope that as we develop our 40m cases into 80m that it's not locally sourced and [from] owned vineyards and all that,' he told investors.
'We want to use our intellectual capital to source product from regions all around the world, and maybe brand over the top of them, so you can get your brand equities, similar to what we're doing with Lindemans.'
Foster's introduced new 'country of origin' wines, sourced from South Africa and Chile, to the ailing Lindemans range last year. This had so far been very successful, the company said.
Have your say...
To post your comment on this story, email us at news@decanter.com, making sure the relevant headline is in the subject field
 I have a better idea: Consumers should slow down their buying of Foster's wines, so they will not need to produce as much as they plan to. Then they could limit their production to maybe 20 million cases a year. I can't wait for the day when they realize that brand equities do not work in the wine business.
Kevin Beck, Oklahoma, USA
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