Page last updated at 13:04 GMT, Tuesday, 26 August 2008 14:04 UK

Write-down hits Foster's profits

Foster's products
Foster's brands include Victoria Bitter, Penfolds wines and Strongbow cider

Brewing group Foster's has reported an 88% drop in profits after slashing the value of its Australian and Californian wine assets.

Net profit at fell to 117.7m Australian dollars ($100.3m; 54.7m) in the year to June, from A$966.2m a year earlier.

Without the write-down - which knocked more than A$700m off the value of its assets - profits came in at A$713.2m.

Foster's also said a review of its wine business meant it was unable to provide guidance for the new financial year.

The brewer and winemaker added that the strong Australian dollar had cut into its earnings, while sliding sales at its Californian wine unit had also knocked its profits.

Acting chief executive Ian Johnston said global trade conditions in the wine market remained "competitive".

"We have not been immune from industry-wide pressures including an economic slowdown in key markets and higher grape prices," he said.

"Put simply, financial returns from wine have not met our expectations."

In an effort to cut its losses, Foster's is currently carrying out a review of its wine operations which could lead to the sale of some of its brands or vineyards, or even a separate stock market listing, analysts said.

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