PREVIEW-Australia's Foster's profit growth seen slowing

* What: Foster's Group Ltd first-half results on Feb. 19

* Slim profit seen as domestic beer, U.S wine sales drag

* Domestic wine business a bright spot

By Victoria Thieberger

MELBOURNE, Feb 15 (Reuters) - Foster's Group Ltd (FGL.AX), Australia's biggest alcoholic drinks company, is expected to report its slowest profit growth in several years as local beer sales and U.S. wine demand slow, and the strong dollar crimps earnings.

However its domestic wine division could prove a bright spot, lifting market share as it reinstated a specialist sales team to target restaurants and fine wine stores.

Foster's, the world's second-largest wine company, is expected to report net profit before one-offs for the six months to Dec. 31 rising 6 percent to A$384.5 million ($347 million), according to a Reuters survey of eight analysts.

That would be down from the double-digit pace of recent years and well below the 22 percent rise in the six months to June 2007.

"Growth appears to have slowed in the Australian beer market and the U.S. wine market, together accounting for about 80 percent of group earnings," said Macquarie Research analyst Andrew Kovacs.

He said Foster's large mainstream brands are in decline, with the 113-year old Victoria Bitter (VB) brand sales down about 11 percent in the five months to November, according to industry data, as consumers switch to VB mid-strength and premium beers. VB accounts for one-third of Foster's domestic beer volume.

Sales of other brands including Cascade, Carlton Cold and Melbourne Bitter also declined.

Foster's has a 50 percent share of Australia's beer market duopoly, but smaller rival Lion Nathan Ltd LNN.AX with a 42 percent share has benefited from a focus on higher-margin premium beers, where total industry sales have jumped 12 percent.

Lion said on Thursday its revenues rose 6 percent despite a 1 percent fall in beer volumes in the three months to Dec. 31.

Foster's U.S. wine business, which is ranked only behind Constellation Brands Inc (STZ.N), is expected to show a small decline in profit as sales slow and the weaker U.S. dollar also reduces earnings translated back into the strong Aussie currency.

"We expect wine earnings in the U.S. to be impacted by a subdued U.S. consumer, fierce competition and higher costs," Merrill Lynch analysts wrote in a research note.

Macquarie said Foster's sales in the U.S. of brands including Beringer, Lindemans, Penfolds and Rosemount fell 2.9 percent in volume terms in the three months to December.

Australian wine sales are expected to have improved as Foster's reinstated a fine wine specialist sales force to restaurants and fine wine stores, reversing a failed strategy to integrate its wine, beer and spirits sales teams. ($1=A$1.11) (Editing by Louise Heavens)