Wine Industry Report

Foster’s Group Limited (”Foster’s”) today agreed the sale of Cellarmaster Wines and Vinpac International in Australia, Cardmember Wines and Carters in New Zealand and its investment in Wine Buzz in Japan to funds managed or advised by Archer Capital Pty Ltd (”Archer”, an Australian private equity firm).

Foster’s announced its intention to divest the Wine Clubs and Services Group in August 2006. Over recent months, Foster’s has sought interest from trade and financial buyers, with strong demand for individual businesses outweighing interest in the combined Wine Clubs and Services Group.

Foster’s completed the sale of Pallhuber in Germany to an affiliate of Orlando Management GmbH (a German private equity firm) in December 2006. In the past few weeks, Foster’s has also completed the sale of: Vinpac International’s cork business to Amorim Australasia Pty Ltd (a leading global cork producer); Cellarmaster Wines Europe to an affiliate of ABN AMRO Capital (a European private equity firm); and Windsor Vineyards and International Wine Accessories (IWA) in the United States to affiliates of Girard Winery, LLC (including a conditional sale of associated property to a third party).

Independent of the Wine Clubs and Services sale process and following a review of small production facilities in Australia, Foster’s also decided today to relocate production from its packaging facility at Airport West in Melbourne to other Foster’s sites and third parties and subsequently close the site. The bottling equipment from the Airport West facility has also been sold to Archer which will extend its capacity to provide contract bottling services to the beverage industry.

Gross sale proceeds from the above transactions in the 2007 financial year, including proceeds from the transactions agreed today, are estimated at approximately $270 million (or approximately $290 million including incremental Wine Clubs and Services business sales in 2006). Foster’s expects to recover book value through completing the above transactions.

The above transactions account for the vast majority of the Wine Clubs and Services Group and Foster’s expects the sales to be substantially complete by the end of the 2007 financial year. Interest in the remaining European services business is strong.

“It’s a good result for Foster’s and the Wine Clubs and Services businesses,” said Foster’s Chief Executive Officer, Trevor O’Hoy. “Foster’s has now completed its transformation from a diversified portfolio of businesses to a leading integrated global drinks producer, while our Wine Clubs and Services businesses are now in the hands of more appropriate owners.”

“These transactions represent the substantial completion of the Wine Clubs and Services sale process, announced in August 2006″, Mr O’Hoy said. “Cash proceeds of the sale will be applied to reducing debt and the recently completed $400 million off-market share buy-back.”