Weak wine sales continued to blight Foster’s Group in the first half of its fiscal year, overshadowing a solid performance in the firm’s beer division.

Net sales for the six months to the end of December 2009 fell by 4.4% to AUD2.3bn (US$2bn), compared to AUD2.4bn in the same period of 2008, Foster’s Group said today (16 February).

At constant exchange rates, sales were broadly flat.

Net profits for the half-year fell by 13.5% to AUD355.7m.

“Today’s result demonstrates the ongoing strength of Carlton & United Breweries and the exchange rate impacts and recessionary economic conditions in global wine,” said Foster’s, which owns Penfolds and Wolf Blass wines.

Weak wine sales continued to hamper Foster’s, despite the group reporting more stable demand in the key Americas market and progress on its wine business restructuring plan.

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Wine sales to the Americas fell by 62% for the half-year, equivalent to a 45% drop at constant exchange rates. The firm’s European, Middle Eastern and African (EMEA) division saw wine sales fall 76%, albeit wholly attributable to exchange rate losses.

Sales at Foster’s Australian beer division, Carlton & United Breweries, rose by 6.6% to AUD486m for the six months.

“We are delivering on our commitments, with the separation of our wine and beer sales force; rationalisation of the non core Australian wine tail brands; sale of non essential vineyards; and delivery of cost savings to plan,” said the group.

“Our AUD100m cost saving program is on track, delivering approximately $35m of benefits in the first half and $70-$80m expected for the full-year.”

The group said that it has sold more than half of a planned sale of 36 vineyards, as part of its wine review.

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