The news that Foster’s Group has suffered an 18% decline in net profits for 2003 has taken some much-needed heat from those involved in the management of Southcorp Wines. It can’t be easy to operate at full tilt under constant, if largely misguided speculation that the business might be sold in part or entirely, and it would now appear that Foster’s is now ruled out as a suitor for at least the short term. To be perfectly honest, nothing I have ever been told by senior Beringer Blass management would lead to me to suggest that it was genuinely interested in buying Southcorp. On the other hand, Southcorp has stuck to its guns that it will trade out of its present situation. For the good of Australian wine, I hope it does. All it might take is a decent run of luck, a commodity presently rather unfamiliar to Southcorp personnel. You never know, but with a couple of normal vintages and a sound adjustment of its business practices in the US and especially in the UK, and we might well be wondering what all the fuss was about. Meanwhile, the Southcorp share price has again dipped below A$3.
