Lifeway Foods Clarifies Recent FDA Enforcement for Pennsylvania Facility

16/05/08 Lifeway Foods,Inc.,makers of the nutritious, probiotic dairy beverage called kefir, announced all of its production facilities remain open and fully operational. The only product line temporary affected is the cream cheese spreads which are produced only in Pennsylvania by LFI Enterprises, Inc., a wholly owned subsidiary of Lifeway. LFI provides several functions beyond cream cheese production. Lifeway Foods had total first quarter sales of $11,122,000, an increase of 23% from the same period a year ago.

Julie Smolyansky, CEO commented, "The Consent Decree has absolutely no impact or affect upon Lifeway's products or production facilities. We vigorously disagree with the allegations of the complaint. These same products have been produced for over 15 years for a very small and select group of customers in the Philadelphia area without one consumer complaint, and while we of course respect the government's position, we do not agree with their unfounded assertions. We know that we are and have been compliant as to any alleged violation asserted in the complaint. We would never place our customers at risk."

Edward Smolyansky, CFO commented, "Lifeway and LFI filed an answer to the complaint denying all material allegations. Lifeway will continue to produce and ship all of its products including its kefir, farmer's cheese, and spreadable cheese products without any interruption. As our most recent quarterly report filed on May 15, 2008 exhibits, our core product lines continue to grow at a tremendous pace, and we have never been more confident about the future of our business as a whole."