Australian brewer Foster's said wine has overtaken beer as the firm's biggest selling drink.

Foster's, which is best known for its brand name lager, racked up wine sales of A$1.93bn ($1bn; �699m) in the 12 months to the end of June, while beer sales were worth slightly less, at A$1.74bn.

Foster's posted a 20.6% rise in profits for the the 12 months to 30 June, to A$560.9m.

The company, which has just over half of the Australian beer market, bought Californian wine maker Beringer in 2000.

It also owns the Wolf Blass brand of Australian-made wine.

'Gathering momentum'

Foster's hoped to offset the impact of changing tastes which have seen a slowing growth in beer sales - a strategy which appears to have paid off.

President and chief executive Ted Kunkel said the full year figures were "a real milestone without a doubt" for the 114-year-old company's growth strategy.

He said it had been a year in which Foster's had had to stand up and demonstrate that its focus on wine as well as beer would deliver returns.

"The result clearly confirms Foster's is on track and the group is gathering momentum," he said.

Rising profile

Beer still beat wine in its overall contribution to profits.

Profits from wine grew just over 30% to A$486.6m, thanks to strong sales in North America.

Beer profits improved by only 5.4% to A$560.6m.

Australian wine exports have expanded rapidly in recent years and are now challenging French wine for the number one slot in the UK market.

"We are seeing in Australia in excess of 5% per annum growth in terms of wine consumption, we are seeing even higher rates in the UK for Australian wines, and in the US," Richard Gibbs, head of economics at McQuarrie Bank in Sydney, told the BBC's World Business Report.

Foster's beer brands include Foster's Lager, Victoria Bitter and Cascade Premium.

As well as Beringer in the US, it's wine business includes the Greg Norman Estates and the Wolf Blass and Yellowglen labels, which are sold in Europe and Australia.

Foster's latest financial results were the first to include a full year's earnings from Beringer, which was bought for A$2.6bn at the end of 2000.