Foster's Brewing Group today announced a global e-commerce initiative aimed at tapping the high growth potential U.S. and British/European markets.

Two significant investments - in leading U.S. direct wine marketer Windsor Vineyards, and Australia's premier e-commerce wine business Wine Planet - will propel Foster's direct wine-marketing business into key offshore markets and take the company's global e-commerce activities to a new level.

The $100 million initiative will result in Foster's wine division Mildara Blass acquiring 100% of Windsor Vineyards, including a growing internet sales business, and 25% of Wine Planet, to finance a roll-out of the business into Britain and Europe.

"These alliances are a natural fit for Mildara Blass, which has already proven its capabilities in exporting Australian wine marketing expertise and knowledge to the world," the President and CEO of Foster's, Ted Kunkel, said. "More than 75% of our wine club customers are now overseas, and the logical next step is to expand our business in the world's largest consumer markets by applying Australian expertise to the opportunity presented by internet direct wine sales."

Mr Kunkel said that Windsor Vineyards, the second largest and most profitable direct wine marketer in the US, already had a strong foothold in the American e-commerce arena, while Wine Planet had identified Britain and Europe, the base for Mildara Blass' European wine clubs, as the next horizon.

"Our current operations share with Windsor and Wine Planet a determination to take innovative approaches to relatively untapped markets. In particular, the British market, where we will assist Wine Planet to establish a fulfilment-oriented website, is one market which has no significant online wine retailing at the moment," he said.

Mr Kunkel said that Foster's e-commerce strategy, which also includes initiatives in providing business-to-business services for the Australian hospitality industry, was cognisant of the inevitable changes taking place in alcohol retailing worldwide. "With our strong traditional wine business and our highly successful wine clubs division, we have a realistic perspective on the relatively small proportion of wine sales currently driven through the internet. But we also recognise the potential, and we are determined to increase our competence in the sector," he said.

The strategic alliance between Wine Planet and Foster's began today, with the signing of a heads of agreement. In the first stage of the investment, the Board of Wine Planet has agreed to issue Foster's a tranche of new shares, at a cost of 25 cents per share, representing 13.8% of issued capital. Wine Planet shareholders will then be asked to approve a further acquisition of 10% of shares on issue, also at 25 cents, over a nine-month period. At the conclusion of the arrangements, Foster's will have a minority holding of 25% of the total shares on issue.

The purchase of Windsor Vineyards has been agreed in principle and is subject to due diligence. The acquisition, which includes state-of-the-art sales and distribution facilities and two award-winning wineries, brings the total number of Mildara Blass direct wine customers to more than one million people worldwide.

"We are now internet-ready in the world's largest consumer market," Terry Davis, Managing Director of Mildara Blass, said. "This strategic acquisition will not only give us a truly global reach in direct wine marketing, but will also provide exciting innovation opportunities in e-commerce, business-to-business marketing and personalised labelling methodologies."

Mr Davis said that the Wine Planet alliance and the Windsor Vineyards purchase clearly portrayed Mildara Blass' determination to address key global markets with a unique wine strategy. ""Australia is our base, and will always be a key market for the business," he said. "However, the alliances we are flagging today are an acknowledgement that our direct wine business is now growing faster in offshore markets, where the potential for growth is more significant."

Further information:

Gayle Austen
Tel: +61 3 9633 2233
Mob: 0418 457 702
Email: gayle.austen@fostersgroup.com

Rell Hannah|
Tel: +613 8626 3307
Mob: 0419 369 075
Email: rell.hannah@beringerblass.com.au