Wine Glut Prompts Write-Down at Foster’s

Foster’s Group Ltd., Australia’s biggest winemaker, will write down the value of its wine unit by as much as $212 million as a glut in California prompts competitors to cut prices to as low as $1.99 a bottle.

The company will cut costs at its Beringer Blass wine business, Melbourne-based Foster’s said. About half the cost savings will be invested on marketing brands such as Meridian, Wolf Blass and Yellowglen to help combat the emergence of so called extreme-value labels.

Wine earnings for Foster’s slumped 28% in the six months ended Dec. 31 after it cut prices to maintain sales in California.