Foster's chief executive Ted Kunkel has resigned – a day before the giant drinks company’s half-year financial results are due.
While Kunkel signalled two years ago that this year he would step down – he has been at the helm since 1992 – analysts are scratching their heads as to why he should leave some 24 before a major financial announcement.
‘It did surprise me,’ an unnamed analyst told the Australian Daily Telegraph. ‘It makes me think what is expected to be a poor result could be a really bad result.’
Analysts believe Foster’s will report a net profit of AU$335.7m, up 1% on last year. There is also speculation that the US wine division, Beringer Blass, will report a drop in earnings of as much as 30%.
Kunkel, a New Zealander, is credited with turning Foster’s from a relatively modest brewer with a market capitalisation in the single millions, into a global drinks company worth AU$9bn.
Foster’s – still synonymous in many people’s minds with no-nonsense Aussie lager – now produces as much wine as beer and makes more money from the former. Under Kunkel the group spent A$2.9 billion buying California’s Beringer in 2000, along with New Zealand’s Matua Valley Wines, and merging it with Mildara Blass to form Beringer Blass Wine Estates.
Foster’s – along with every other drinks multinational, most notably its keen rival Southcorp – has found the post-September 11 market very tough to operate in. But, the Sydney Morning Herald says, ‘Foster’s is well placed. Its competitors are also under pressure but few have Foster’s balance sheet, or the cash flows from brewing, to support them through the tougher times.’
Carlton & United Breweries managing director Trevor O’Hoy, a former Foster’s man, is tipped to succeed Kunkel. Another possible candidate is Coca-Cola Amatil CEO Terry Davis.
Written by Adam Lechmere, and agencies