Southcorp's shares have risen in recent months on speculation that it could become a takeover target.
Southcorp's Lindemans, one of the few globally successful wine brands, is even bigger than Penfolds.
John Grant, a former Southcorp sales executive, joined KJ earlier this year as executive vice president.
Yellow Tail is on track to brush aside Southcorp's Lindemans as the top-volume Australian wine in America.
Southcorp's Lindemans is a top imported brand, and another Australian label, Rosemount Estate, is not far behind.
Southcorp, Australia's largest wine producer and exporter, naturally figures that it will be an acquirer in the consolidation wave.
Whether he succeeds may well determine if Southcorp will be a junior or senior partner in the Australia-California wine dance.
"We have a fantastic set of brands and assets, " asserts Thomas Park, the Sydney-based executive general manager of Southcorp Wines.
Southcorp talked to Beringer and, according to wine industry sources, has negotiated with Kendall-Jackson (see following story) and other California wineries.
Southcorp, which owns the two biggest-selling Australian wine brands in America, has seen its share price increase by over 50% this year.
That doesn't have the Aussie wine behemoths Southcorp and BRL Hardy laughing.
"This proposal involves merging Southcorp with Foster's worldwide wine business, " he said.
In the letter, Southcorp chairman Brian Finn said Southcorp had "a constructive alternative to the current situation" which "might prove a mutually-beneficial solution".
So it will fall to the American-born Harvard Business School graduate to boost the share price and steer Southcorp through a period of vulnerability.
The arrangement would stop short of a full takeover, but the letter said Foster's would have a "controlling stake" in Southcorp of about 60%.
"Lindemans represents consistent quality year in, year out, " says Park, who marketed such products as Maxwell House coffee and Kraft cheese before joining Southcorp.
The big Australian winemakers, such as Southcorp, scientifically classify, grade and blend grapes from various regions in a way that would make the tradition-bound French choke.
This consistency and volume allows Southcorp, which exports 65% of its bottled wine, to develop global brands (Wynns Coonawarra Estate and Seppelt are two other Southcorp labels).
Analysts were divided on Thursday about whether Fosters was more likely to go for a takeover or merely wanted to take a big enough chunk of Southcorp to prevent it falling to a rival.
Southcorp has already invested with a U.S. partner in the Seven Peaks winery in Edna Valley on the coast of central California and is starting a 200-hectare vineyard of its own not far away.
The runaway vintage is quite a feat for the Casella winery, founded by two Italian immigrants in 1969, which only recently was selling wine to the company that's now its main competitor, Southcorp, the Sydney-based giant.
For example, Southcorp, which owns 6, 000 hectares of vineyards across Australia, blends grapes from 17 different regions to produce its Lindemans Bin 65 Chardonnay, which, like many of its wines, was originally developed for overseas palates.
That proved to be a flop (even back in the day, our correspondent related to me how difficult the acquirer was to deal with) which Fosters, with all due awareness, compounded in swallowing Southcorp in 2005.
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