CEDC, as an early entrant in the post-Communist market in Poland, has over 11 years of experience in introducing, developing and refining sales, marketing and customer service practices in the diverse and rapidly developing Polish economy. CEDC believes this experience gives it a competitive advantage in the alcoholic beverage distribution business. CEDC believes that it is currently the only independent national distributor of an extensive and diversified alcoholic beverage line in Poland.

CEDC competes with various regional distributors in all of its distribution centers and satellite branches. This competition is particularly vigorous with respect to domestic vodka brands. One of the largest, foreign-owned chain stores also sells to smaller retailers. CEDC addresses this regional competition, in part, through offering to customers in the region a single source supply of more products than its regional competitors typically offer and CEDC is able to leverage its market share to be price competitive while still maintaining its margins.

The brands of beers, wines and spirits distributed by CEDC compete with other brands in each category, including some CEDC itself distributes. CEDC expects to see increased competition from Heineken, SAB and Carlsberg in the import beer sector while CEDC believes that the import wine and import spirit categories will remain less competitive.

Market for Product Line

In 2004, approximately 95% of CEDC's total sales were through off-trade locations (including 6% through other wholesalers, a decrease from 12% in 2003), where the alcoholic beverages are not consumed, and 5% through on-trade locations, where the alcoholic beverages are consumed. A breakdown by value of the off-trade and on-trade is provided below.

Off-trade Locations
	Supermarket and locally-owned shops	71%
	Wholesalers	6%
	Hypermarkets	15%
	Gas Stations	3%
On-trade Locations		5%
Total		100%

Off-Trade Market
There are two components of CEDC's sales to locations where alcoholic beverages are not consumed on premises. The most significant are small, usually Polish-owned and managed businesses, including small grocery stores. At December 31, 2004, CEDC sold products to approximately 31,411 such business outlets, which typically stock and sell relatively few alcoholic beverage products and wish to have access to the most popular selling brands. The other components of the off-trade business are large supermarket chains, which are typically non-Polish-owned, as well as smaller multi-store retail outlets operated by major Western energy companies in connection with the sale of gasoline products. The large supermarket chains typically offer a wide selection of alcohol products, while the smaller retail outlets offer a more limited selection.

CEDC also sells products throughout Poland through other wholesalers. There are a few written agreements with these wholesalers as this distribution channel is going through a major consolidation and CEDC's strategy is to go directly to retail outlets, bypassing this distribution channel.

On-Trade Market
There are three components to CEDC's sales to locations where alcoholic beverages are consumed: (i) bars and nightclubs, (ii) hotels, and (iii) restaurants. Bars and nightclubs are usually locally managed businesses, although they may be owned and operated in major cities by a non-Polish national. Hotels include worldwide chains such as Marriott, Sheraton, Holiday Inn, Hyatt and Radisson, as well as the major Polish chain, Orbis. Restaurants are typically up-scale and located in major urban areas. At December 31, 2004, CEDC sold products to approximately 5,850 on-trade accounts.

Sales Organization

CEDC employs approximately 419 salespeople who are assigned to one of its 15 distribution centers and 87 satellite branches. Each distribution center and satellite branch has a sales manager, who meets with the salespeople twice a week to review products and payments before the salespeople begin calling customers. The sales force at each office is typically divided into two categories: traditional trade and key accounts. Salespeople work on a daily pre-order system, which is routed by region. The salespeople contact approximately 20 customers per day. At the end of their day, they return to the office or telephone in their orders, which are processed and dispatched the next morning. The sales force work exclusively on a commission basis and are supplied with a company car and a mobile phone. Approved travel expenses are covered by CEDC. CEDC conducts periodic training to improve the salesmen's knowledge of CEDC's products as well as improve the sales force's skills.

Marketing

CEDC has its own marketing department, which consists of ten people, including six brand managers, who manage the marketing support of the brands CEDC imports exclusively into Poland. CEDC manages a combined marketing budget for all exclusive brands of approximately $2.5 million, of which CEDC contributes up to 50% of the total budget. The brand owners contribute the remaining part. CEDC is responsible for all of the marketing efforts within Poland from point-of-sale production, below the- line promotions, print work and public relation events, as well as overseeing the draft beer operations throughout Poland.