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May 10, 2006
CEDC Comments on Polish Anti-Monopoly Office Decision Bala Cynwyd, Pennsylvania: Central European Distribution Corporation, today commented on a Polish Anti-Monopoly Office decision. CEDC, as previously disclosed, has a strategy regarding the potential acquisitions of different brands in Poland. One of these potential acquisitions has resulted in a negative decision from the anti-monopoly office. This decision is related to the potential acquisition of Jablonna, the owner of a controlling position of Polmos Lublin, which is the producer of the leading flavored vodka in Poland. William Carey, CEO, stated, "Our potential combined market share (CEDC and Jablonna) in the total vodka market would remain under the 40% threshold that is specified under the Polish Anti-Monopoly Act, however, we understand the decision is primarily related to the potential combined market share in the flavored vodka segment. We are surprised by this decision, as according to official government statistics as well as our own estimate of the flavored market, we believe the potential combined share of the flavored market is closer to 40%, whereas the anti-monopoly office puts it closer to 50%. We will appeal today's decision as we believe our estimates to be accurate thereby not justifying a dominant position in the flavored market." The 2006 guidance given by the company does not include the impact of this potential acquisition as well as any future acquisitions. CEDC is the largest vodka producer in Poland by value and produces the Absolwent, Zubrowka, Bols and Soplica brands, among others. CEDC currently exports Zubrowka to European and Asian markets. CEDC is also the leading distributor by volume and the leading importer by value of alcoholic beverages in Poland. CEDC operates 15 distribution centers and 78 satellite branches throughout Poland. CEDC imports many of the world's leading brands to Poland, including brands such as Remy Martin, Metaxa, Jim Beam, Sauza Tequila, Grant's, E&J Gallo, Sutter Home, Torres, Penfolds and Concha y Toro wines, Corona, Foster's, and Guinness Stout beers and Evian.
Contact: This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by forward-looking statements. Investors are cautioned that forward-looking statements are not guarantees of future performance and that undue reliance should not be placed on such statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements or to make any other forward-looking statements, whether as a result of new information, future events or otherwise unless required to do so by the securities laws. Investors are referred to the full discussion of risks and uncertainties included in the Company's Form 10-K for the fiscal year ended December 31, 2005, and in other periodic reports filed by the Company with the Securities and Exchange Commission. |
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