DOW JONES NEWSWIRES, Edited Press Release
November 7, 2002

LONDON -- Scottish & Newcastle said Thursday that Baltic Beverages Holding is expanding its area of operation to Kazakhstan, following the acquisition of a 76% stake in Irbis Brewery and plans to build a new brewery there.

Irbis, located in Alma-Ata, is one of the leading beer brands in the premium segment in Kazakhstan, S&N added.

Baltic Beverages Holding is 50%-owned by Hartwall/Scottish & Newcastle, while the remaining 50% is owned by Carlsberg Breweries.

Moving into Kazakhstan will significantly strengthen Baltic Beverages Holding's continuing growth, Scottish & Newcastle said.

In order to secure additional capacity Baltic Beverages Holding will start construction work on a new brewery as soon as the necessary authorisation is obtained. S&N said the cost estimate for the first construction stage is EUR45 million which will yield a target capacity of 75 million liters. The new capacity is scheduled to be ready in time for the summer season 2004.

During the construction stage, the company plans to strengthen brand positioning with products from the existing Irbis Brewery and products manufactured at Baltic Beverages Holding breweries in Russia.

S&N said Baltic Beverages Holding has identified substantial potential for growth in Kazakhstan.

The per capita consumption of beer in the country grew 20% last year, reaching a level of 20 litres per head which corresponds to one fourth of the beer consumption level in Western countries. The market is fragmented among a large number of smaller players.

Currently, Baltic Beverages Holding has a total of fifteen breweries, eight of which are located in Russia, two in Ukraine , four in the Baltic States and one in Kazakhstan.

An additional three breweries are currently under construction, S&N said.