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Multimillion Dollar Loss Hits Australian Beverage Company - 2004-06-14


An Australian beverage maker is facing tough times in its global wine business and a Chinese state bank undergoes massive restructuring.

A North American wine glut is blamed for a $200 million loss for Foster's, Australia's biggest wine producer and maker of the country's best known beer brand.

Jamie Odell, Foster's head of global wine trade, says the setback is forcing changes to company strategy, including bigger investments in new products and a more efficient supply chain. "What this plan delivers is a more balanced business model to deal successfully with the market of today and tomorrow," he says.

China says wheat harvest this season (summer) will increase for the first time in four years. The agriculture ministry expects a harvest of 455 million tons for the year, a three percent rise from last year. The improvement is due to good weather, better pest control and tax cuts to farmers.

China's grain production has fallen in recent years, and a bumper harvest means it might reduce its wheat imports in the next few months.

In the banking sector, China Construction Bank will separate into two companies in the next few months. One company will manage non-banking operations, such as investments, while the other will concentrate on deposits, lending and credit card operations. The move is part of China's plan, started in December, to restructure its state banks, which are troubled by billions of dollars in unpaid loans.

The U.S. car giant, General Motors, has set up a joint venture with Samsung Card in South Korea to offer car financing. G.M. will own 80 percent of the new company.

Also in South Korea, the central bank, Bank of Korea, estimates that the North Korean economy grew nearly two percent last year, partly due to increased industrial production. The bank says this is the fifth consecutive year of growth for the Stalinist country, which has in recent years suffered from famine caused by natural calamities and economic mismanagement.

North Korea's state-controlled economy remains largely closed to foreigners and the country relies heavily on international aid to feed its impoverished population.