July 23, 2008 - Foster's Group, the biggest Australian maker of beer and wine, said Monday that Ian Johnston, nonexecutive director, would serve as acting chief executive while it sought a successor to Trevor O'Hoy. The search for a chief coincides with the company's review of its wine business as earnings fall and market share shrinks.

O'Hoy paid 3.2 billion Australian dollars, or $3.1 billion, for Southcorp in January 2005 to double the size of Foster's wine unit. Foster's said in June that O'Hoy would leave and the company announced a review its wine business.

Foster's said Monday that a new chief exexecutive would be appointed in the first half of its 2009 fiscal year, and that the review of the wine business was also expected to be completed within the same period.

Analysts have said they expect Foster's to either sell its wine business or consider a separate listing of its beer and wine businesses.

Johnston, 61, has been a director at the company since September and was previously an executive with Unilever and Cadbury, Foster's said. O'Hoy, who announced his resignation on June 10, stepped down Monday.

"Ian's brief from the board is to maintain senior management focus and energize the team to drive day-to-day business performance," the company said. "He will also assist Chairman David Crawford in overseeing the wine review."

Johnson retired as Cadbury's head of global confectionary in 2000 after almost 20 years at the company. Before that, he spent 13 years with Unilever, the consumer products maker, in Australia, Canada and Europe.

Foster's shares rose 18 cents, or 3.9 percent, to close at 4.83 dollars in Melbourne, paring its decline this year to 26 percent.

O'Hoy, 53, had been with the company for 33 years, starting as an executive trainee. Before succeeding Ted Kunkel in 2004, O'Hoy ran the Australian brewing business and was chief financial officer.

"We again thank Trevor for his significant contribution throughout his 33 years with Foster's and wish him well in his future endeavors," said Crawford, the chairman.

With beer sales stalling, Foster's began expanding its wine business in 1996, paying 482 million dollars for Mildara Blass. The company moved into California in 2001 with the 2 billion-dollar purchase of Beringer Wine Estates Holdings.

O'Hoy's bid for Southcorp was a bet that acquiring the company, whose brands include Lindemans, Rosemount and Penfolds, would provide global leadership in bottled wine. Crawford last month said Foster's had paid too much for its wine business, prompting the review.

Originally published by Bloomberg, Reuters.