Kirin Forms License Agreement with North Winds Distribution LLC

04/08/06 Kirin Brewery Company, Limited has announced that Kirin Europe GmbH, its main operating company in Europe, has formed a licensing agreement with Russian company North Winds Distribution LLC. Under the agreement NWD will produce and market Kirin brands after the trade mark registration, representing a shift to local production of Kirin products in Russia from September, 2006.

Currently, Kirin brand products destined for the Russian market are produced on a contract basis by Charles Wells Ltd. in England and marketed in Russia by NWD via Kirin Europe. Under the new agreement, the production of KIRIN ICHIBAN (Kirin Ichiban Shibori) for the Russian market will be entrusted by NWD to Ivan Taranov Breweries in Kaliningrad, which is a subsidiary of Heineken Russia. NWD will continue to be responsible for marketing the product. By commencing local production Kirin aims to improve cost competitiveness as well as product freshness and expand sales of Kirin brand products in the Russian beer market that has been showing double-digit growth.

The beer market in Russia has approximately tripled in volume over the past ten years, driven by factors such as economic growth and health trends, and it expanded to become the world’s fourth largest beer market by volume in 2004*. This continuous growth has made Russia an attractive market in Europe, leading to considerable investment by the world’s major beer companies. Kirin’s activities in this market to date have been based on expanding sales of KIRIN ICHIBAN (Kirin Ichiban Shibori) particularly to Japanese and Asian restaurants and supermarkets. By commencing local production under this new agreement Kirin will be able to significantly reduce costs, increase price competitiveness and provide more fresh beer to the market, with the aim of achieving sales volumes of 80,000 cases (1case=7.9litter) in 2006, over two times higher than in the previous year.

Kirin announced Kirin Group Vision 2015 May in 2006, and is targeting a quantum leap in growth. To achieve this quantum leap, Kirin is closely analyzing growth markets in a consolidating global beer industry, and is considering new business alliances as part of active measures to expand operations and boost profitability as one of Asia and Oceania’s leading companies in the area of food and health.