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Kompania Piwowarska is reducing costs

26 February 2009

The recent actions of Kompania Piwowarska, as a response to the economic crisis, and including cost analysis, as well as more restrictive identification and control of all expenses, have led to a decision to suspend two production lines and to reorganize one distribution centre.

Despite good results in sales in the previous year, Kompania Piwowarska is already experiencing and reacting to the effects of the global crisis. The analysis of present situation, threats, market trends and prospects for future actions shows that the slowdown in the brewing market will continue. The expected lower sales are a result of a worse financial situation of the customers and increased financing difficulties of our distributors. Moreover, the current weakening of the rate of zloty will increase the costs of operating, and the introduction (March 1, 2009) of a drastic increase in the excise, as much as 13.6%, will cause higher beer prices.

All of those factors negatively impact the company and make the future less foreseeable, which requires the company to be more flexible in order to react and adjust to the new circumstances. As a result, we expect that the surplus of Kompania Piwowarska's production capacity will reach 2 million hectoliters or more in 2009.

After an analysis of the present economic situation and the prospects for change in the Polish market, Kompania Piwowarska has made decisions aiming to secure overall work spaces and reduce operating costs in the long run. It has been decided to reduce production capacity by suspending operations of two bottling lines with highest production costs within the whole KP, which are located in Kielce and to reorganize labor in the Opole distribution centre. As a result of those decisions, contracts with over 70 workers of the brewery in Kielce will be terminated, as well as with over 10 distribution workers in Opole.

For the dismissed workers severance pay will be prepared, size of which will depend on the employees' age and length of employment. They will receive severance pays higher than described by the law, of the amount specified by Kompania Piwowarska Severance Pay Policy. Kompania Piwowarska also guarantees help in finding new employment. For those workers we will conduct meetings that will prepare them for future job interviews and individual meetings aimed to prepare application documents as well as advisement concerning future career steps.

In accordance with the law, the employer has begun consultations with workers unions and will cooperate with them during the whole process of changes planned to last until the end of March 2009.

Commentary of Wojciech Moliński, vice-president of Kompania Piwowarska's HR: „It is not easy to make decisions that directly impact our employees. We have decided to make those changes after a thorough analysis of a broad economic context as well as perspectives that influence the operating of our company".

To the editor:
Kompania Piwowarska - Leader in the brewing industry in Poland
Kompania Piwowarska is the largest brewing company in Poland. Hundreds of years of experience in brewing, latest technology and strict compliance with global standards of production (World Class Manufacturing) ensure the highest quality of its products. Amongst the brands are: TYSKIE (favourite beer of Polish people), ŻUBR (second highest in sales in Poland), LECH, Dębowe Mocne, Pilsner Urquell, Redd's, Dog in the Fog, Miller Genuine Draft and Peroni Nastro Azzurro. Kompania Piwowarska was established in 1999 as a result of a merger between Tyskie Browary Książęce and Lech Browary Wielkopolski. In 2003 it was joined by Browar Dojlidy from Białystok, and in 2008 by the brewery in Kielce. In fiscal year ended March 31, 2008 KP's sales reached 14.5 million hectolitres of beer.
SABMiller - one of the largest producers of beer in the world
Kompania Piwowarska is a part of one of world's largest producers of beer - SABMiller. The group is present in over 60 countries on six continents and its portfolio consists of over 150 strong brands (e.g. Pilsner Urquell, Grolsch, Miller Genuine Draft, Peroni Nastro Azzurro or Castle Lager). SABMiller is one of the largest bottlers of Coca-Cola products in the world (excluding USA). In fiscal year ended March 31, 2008 SABMiller has reached sales of 21.4 billion dollars and 3.2 billion dollars in profits prior to taxation. Sales of beer have amounted to 239 million hectolitres.
Additional information:

Paweł Kwiatkowski
Director of Corporate Affairs, Spokesman for the Press
KOMPANIA PIWOWARSKA SA
ul. Szwajcarska 11, 61-285 Poznań
Telephone +48 61 8787 881
Fax +48 61 8787 850
Mobile +48 601 599 198
pawel.kwiatkowski@kp.sabmiller.com
http://kp.pl

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