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Published:  23 July, 2008

The Australian wine giant Southcorp has forced the resignation of chief executive Keith Lambert, following mediocre results and falling profits. Southcorp announced the move earlier this week, two weeks after it slashed its annual profits forecast by 14%. Brian Finn, chairman of Southcorp, will assume the role of executive chairman until a successor is appointed. Finn thanked Lambert for leading the company through the integration with Rosemount, but said: With that transformation complete and having regard to recent financial performance, the board believes that different leadership attributes and business experiences are required to take the company forward.' He added: The board is committed to the strategy of enhancing Southcorp's leadership as a premium wine company. Following the review of the half-year and full-year earnings outlook, the board has directed management to focus on improving business performance through better product mix, lower operational costs and more effective promotional spending.' Lambert is the son-in-law of major shareholder Bob Oatley and became CEO after the Oatley family-owned Rosemount merged with Southcorp in 2001. Lambert's sudden, if not surprising, departure has fuelled speculation in Sydney's financial district that a A$3 billion-plus takeover could be on the cards, with Diageo, Allied Domecq and Foster's mooted as the most likely bidders. Southcorp's share price has been decimated in the last 12 months, falling from A$7.40 a share to around A$4.40. Oatley's departure raised the share price marginally and was welcomed by analysts. According to Dow Jones News Wires, International Wine Investment Fund, which owns 180,000 shares in the wine producer, Southcorp should look for an executive who has run a multiple product company, such as Nestl.