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Foster’s looks to South America, South Africa

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.

Written by Richard Woodard

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