Talk about champagne tastes on a beer income.

Only in this case the beer income will do fine, thank you. Foster's has been left a little tipsy from its foray into wine, forced to write down a massive $605 million and marring what could have been a good result.

One consolation is that the $718 million net profit and a higher earnings per share was still bigger than the write-down.

Foster's paid too much for Southcorp three years ago in the middle of a grape glut, leading to an oversupply of wine.

Then it made an even bigger blunder, introducing what it called a multi-beverage distribution channel, meaning the same sales reps selling beer also sold plonk - oops, fine wine. Can't imagine why that didn't work.

At last it's making amends by changing its selling strategy and setting up what in Canberra would be called a special task force to review the wine division. It reports by the end of the year.

This has been made tricky by the fact that technically it no longer has a chief executive - oh well, who needs one anyway? - though whoever replaces Trevor O'Hoy will apparently be briefed about where the review is going in the meantime, which sounds sensible until you consider the risk of frightening away any decent prospect.

Since its Australian wine operation is profitable, the big problem is in the US, although the weakening dollar should help clear some of the surplus plonk before it can flog off any assets, or more likely follow the latest fashion of splitting the business into separate beer and wine stocks.

Meanwhile, back at the brewery which produces about two-thirds of the group's profit, Foster's has shown great skill in boosting its beer income, thanks to the success of its low-carb Pure Blonde and despite losing some market share of the big-selling VB.

When it eventually gets its wine division into shape - which is only a matter of time - Foster's will be quite the cash, um, cask. Certainly its healthy cash flow means it has no trouble paying a consistent fully-franked dividend which, if you bought shares at their current price, would give you a yield of 4.7 per cent - though there are better returns around and, besides, you've just missed this payout.

More to the point is that you're likely to be waiting a while before you see any decent capital growth.

Then again, you can say that applies to most of the market.

Brokers are split down the middle about the stock, with three calling it a buy, three a sell and seven a hold.

Advantages

Cash flow

Good dividend

Low debt

Top brands

Disadvantages

Wine writedown

Exchange rate risk

New MD unknown

Gearing

Verdict

Owns strong brands in a very competitive and recession-proof global business. Although a safe stock for the times, it's not a great bargain.