Beer and Beer-Type Beverages: Taxable Sales Volume (Jan

2009 First-half Financial Results and Future Business Strategy

August 2009 ASAHI BREWERIES, LTD.

URL http://www.asahibeer.co.jp Contents

Overview of Financial Results for the First Half of 2009. …………1.. 2009 Full-Year Forecasts………………………………………………2 Overview of First Half 2009 ………………………….…….……………3 First-half Sales of Beer-type Beverages…………………………….4 Sales Forecasts for Beer-type Beverages……………….………….5 Beer Brand Strategy ……………….…………….……………………6 .. Happoshu and New Genre Brand Strategy…………………………………7 .. Other Alcohol Category RResultsesults and Future Strategy ………………8 Streamlining Marketing Costs ………………………..….……...... 9 Asahi Soft Drinks Business OverviewOverview and Future Strategy ……………10 Food and Healthcare Business Overview and Future Strategy ………11.. Overseas Business Overview and Future Strategy ……………………12 Growth of Tingyi-Asahi-Itochu Beverages Holding Co. Ltd. …………13 Acquisition of Schweppes Australia……………….…..…………...... 14 Investment in Tsingtao Brewery………….……….……………...... 15 Overview of Financial Results for the First Half of 2009

（billion yen）（billion yen）（billions of yen） Operating profit Net profit Sales 1H 2009 1H 2008 Inc./ Dec. YoY (% ) 50.0 700.0 Results Results 672.6 670.2 664.4 666.1 Alcoholic beverages 443.3 455.0 (11.7) (3)% 656.6 Soft drinks 144.9 142.0 2.9 2% Food and healthcare 46.0 34.8 11.3 32% 40.0 Overseas 28.7 23.4 5.3 23% Other 7.2 11.0 (3.8) (34)% 600.0 Net sales 670.2 666.1 4.0 1% 30.0 30.8 30.7 Alcoholic beverages 23.1 30.7 (7.6) (25)% 28.6 Soft drinks 1.6 1.4 0.2 17% 21.5 Food and healthcare 0.4 0.1 0.3 225% 20.0 23.1 Overseas (4.8) (2.6) (2.2) -

500.0 Other 1.2 1.2 (0.0) (2)% Operating profit 21.5 30.7 (9.2) (30)% 22.1 Equity metod income 5.6 5.9 (0.3) (6)% 10.0 19.0 18.9 14.5 13.8 Ordinary income 27.8 34.1 (6.3) (19)% Extraordinary profit (loss) 14.0 (0.7) 14.8 - Net income 3.2 17% 0.0 400.0 22.1 18.9 2005 2006 2007 20082009 2009

（billion yen）（billion yen）（billions of yen） Operating profit Net profit Sales 1H 2009 1H 2008 Inc./ Dec. YoY(% ) Results Results 140.0 1,600.0 Alcoholic beverages 1,005.0 1,019.6 (14.6) (1)% Soft drinks 306.5 296.6 9.9 3% 120.0 1,508.0 1,464.1 1,462.7 1,500.0 Food and healthcare 97.5 81.7 15.8 19% 1,446.4 1,430.0 Overseas 80.6 43.3 37.3 86% 100.0 Other 18.3 21.5 (3.2) (15)% 1,400.0 Net sales 1,508.0 1,462.7 45.3 3% 94.5 90.2 Alcoholic beverages 81.0 91.1 (10.1) (11)% 80.0 88.7 87.0 88.0 Soft drinks 7.3 4.5 2.7 61% 1,300.0 Food and healthcare 2.6 2.0 0.6 31% 60.0 Overseas (4.2) (5.8) 1.6 - Other 1.3 2.8 (1.4) (53)% 1,200.0 40.0 Operating profit 88.0 94.5 (6.5) (7)% Equity metod income 7.8 9.1 (1.3) (14)% 50.0 1,100.0 Ordinary income 92.0 96.5 (4.5) (5)% 20.0 39.9 44.8 44.8 45.0 Extraordinary profit (loss) 3.9 (13.5) 17.4 -

0.0 1,000.0 Net income 50.0 45.0 5.0 11% 200520062007200820092009(E) 2

Results

Alcoholic ◆Achieved sales targets for happoshu and new genre due to impact of new products and other factors Beverage ◆Cost controls offset the decline in beer-type beverage sales due to Business deteriorating economic conditions

Soft ◆Due to growth in core brands, achieved growth (3%) above the industry average (-2%) Drinks Drinks ◆Achieved earnings growth despite the increase in costs of ingredients Business and increased competition

◆Both Asahi Food and Healthcare Co., Ltd. and Wakodo Co., Ltd. Food and continued to show sustained growth Healthcare ◆Amano Jitsugyo Co., Ltd., which became a consolidated subsidiary in the second Business half of fiscal 2008, achieved strong growth attributable to Group synergies

◆We supported the sustained growth of Tingyi-Asahi-Itochu Beverages Overseas Holding Co. Ltd. (Chinese soft drinks business) amid intensifying competition Business ◆Started new business development with Schweppes Australia and Tsingtao Brewery Co.

◆Responded to the shift in demand from beer and happoshu to new genre Issues due to the economic slowdown ◆Failed to achieve profit targets in existing overseas businesses (Chinese beer business, Korean soft drinks business) 3

■ Beer and Beer-Type Beverages: Taxable Sales Volume (Jan. – Jun. 2009) (millions of cases) Industory total Asahi Breweries Cases YoY change Composition Cases YoY change Market share Beer 106.61 (5.5)% 49.1% 53.01 (5.8)% 49.7% Happoshu 47.38 (12.7)% 21.8% 13.27 (3.7)% 28.0% New genre 63.26 27.4% 29.1% 13.81 24.0% 21.8% Total 217.24 0.2% - 80.09 (1.3)% 36.9%

■ Asahi Breweries’ Market Share by Category (Jan. －Jun. 2009)

Beer Happoshu New genre Company D Company D 8.8% 8.6% Company D Asahi Company C Asahi Company C 22.5% 21.8% 3.5% 28.0% 14.0% Asahi 49.7% Company C Compnay B Company B 15.2% Company B 26.8% 58.7% 39.6%

■ 2009 Market outlook 09 vs. 08 Approximately 1–2% Beer Approx. -6-7% decline Happoshu Approx. -15-16% for beer-type New genre Approx. 21-22% beverages overall

■ 2009 Sales Targets by Brand (millions of cases) 2009 target 2008 YoY Super Dry 117.80 125.30 (6.0)% The Master 2.10 - - Other 2.60 3.71 (29.9)% Beer total 122.50 129.01 (5.0)% Style Free 12.00 11.38 5.4% Cool Draft 6.00 - - Other 9.00 17.64 (49.0)% Happoshu total 27.00 29.02 (7.0)% Clear Asahi 19.00 14.12 34.6% Asahi Off 8.00 - - Mugishibori 3.10 - - Other 1.90 9.35 (79.7)% New genre total 32.00 23.47 36.3% Total 181.50 181.50 0.0% 5

FirstFirst HalfHalf 20092009 SecondSecond HalfHalf 20092009 20102010

Boost brand value through the “ Challenge and Commitment of No. 1 Brand” campaign

Refreshingly Sustainable Project Embody Bold Flavor Project

The Master

Comparison of Super Dry Sales by Container Refreshingly Sustainable Project (quarterly comparison) 105% Donated 1 yen per can of Super Dry Bottles Cans Kegs Total manufactured between late March 100% and late April

95% ・Donated a total of around 220 million yen ・Sales during period were up 8% versus previous year 90% ・Improved brand image (“Fun,” “Try Something New,” etc.) 85%

Will carry out Phase 2 this fall 80% 1Q 2008 2Q 2008 3Q 2008 4Q 2008 1Q 2009 2Q 2009

・Sales momentum recovered in the second quarter, and we will step up efforts to raise brand value to maintain this momentum through the second half 6

FirstFirst HalfHalf 20092009 SecondSecond HalfHalf 20092009 20102010

Develop Style Free into the leading brand in the functional happoshu market Obtain further trials for Cool Draft and promote its sharp taste

For Clear Asahi, tout its No.1 spot in the wheat-based new genre market, and further solidify the Happoshu Style Free Cool brand Draft Continue touting Asahi Off as the only functional product in the wheat-based new genre market

Sep. 15 launch Sep. 15 launch Meet the needs of consumers seeking more Mugishibori rich and satisfying flavors in the expanding

New genre Clear Asahi Off new genre market Asahi *Barley-based new genre: Liqueur (happoshu) (1)

* Source: Surveys by Asahi, * Source: Surveys by N = 400, Conducted during Clear Asahi primary consumer share (%) Characteristics required of new genre products in future Asahi, N = 1000 the middle of every month 14.8 7 6.3 6.5 6.3 High alcohol content 17.5 5.7 6 Zero sugar 17.8 4.7 Light flavor 18.7 5 4.2 4.3 4.3 4.2 Can drink in big gulps 19 4 3.9 3.8 4 Good aftertaste 23.1 2.8 Solid flavor 23.8 3 2.3 Easy to drin k 26.8 RefreshingHas aflavo kick 31.5 2 r Beer-like taste 31.5 1 0.3 0 Satisfying 32 0 Interesting flavor 32.6 Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Jun. Rich taste 34.6

0 10203040 ・Build a product portfolio that meets diversifying consumer needs ・Bolster initiatives aimed at making Style Free and Clear Asahi leading brands 7

■ Overview of the First Half 2009

・ Sales declined due to the voluntary shochu recall, revision of the imported wine product portfolio, and other factors ・ Strong sales of new products Slat (RTD alcohol segment) and Black Nikka Clear Blend whisky ・Continued earnings structure reform focused on streamlining advertising and promotional expenses

■ Past performance and 2009 target (billions of yen)

(billions of yen) 2008 YoY 2009 target YoY Shochu 52.7 (4.0)% 51.7 (1.9)% RTD 31.4 (12.1)% 29.3 (6.7)% Whisky 27.5 0.7% 25.7 (6.6)% Wine 14.8 (2.8)% 12.6 (15.1)% Other 3.2 0.0% 4.2 29.8% Other alcohol total 129.7 (4.9)% 123.5 (4.8)%

•Promote efficiency in production and sales with priority on improving profitability •Aim to develop leading brands and create new value and new demand 8

Advertising and sales promotion expenses by category (billions of yen) 2004 2005 2006 2007 2008 1H 2009 YoY 2009 target YoY Sales promotion expenses 76.3 77.8 80.8 77.9 64.9 29.1 (1.6) 64.4 (0.5) Advertising expenses 32.3 32.2 32.7 34.9 32.3 19.5 2.8 31.7 (0.6) Total 108.6 110.0 113.5 112.8 97.2 48.6 1.2 96.1 (1.1) Breakdown Beer 58.0 54.9 58.6 59.5 50.1 24.9 0.4 50.5 0.4 Happoshu 20.4 12.2 9.9 13.0 10.1 5.5 0.9 8.5 (1.5) New genre - 9.2 13.0 10.0 10.9 6.2 1.1 12.6 1.7 Beer-type category total 78.4 76.3 81.5 82.5 71.0 36.6 2.4 71.6 0.6 Other alcoholic beverages total 30.2 33.7 32.0 30.3 26.2 12.0 (1.2) 24.5 (1.7)

・Advertising expenses increased due to the launch of new beer-type products, but overall advertising and promotional expenses were curbed by 1.4 billion yen versus plans due to a decrease in variable expenses in the Other Alcohol Category.

・Left initial annual advertising and promotional budget unchanged to bolster brand investment aimed at maintaining, and increasing, sales momentum in the fiscal second half ・Continue striving to efficiently use of marketing expenses while focusing investment on raising Super Dry’s brand value and on the expanding new genre market 9

Asahi Soft Drinks Co., Ltd.

◆ Growth Strategies, Structural Reform, and Taking on New Areas ・Total sales volume rose 3% versus previous year, exceeding the industry average (-2%) Mitsuya brand product sales increased 13% from previous year due to launch of Mitsuya Cider All Zero ・Despite a deterioration in product mix and higher advertising and promotional expenses, profits turned upward due to increased sales and larger-than-planned cost reductions.

⇒ Aim for 3% annual growth with priority placed on further strengthening core brands ⇒Step up structural reforms, including development of optimal production and distribution systems and fixed-cost streamlining

■ Asahi Soft Drinks 1H 2009 results and 2009 target

1H 2009 YoY 2009 target YoY Sales volume (million cases) 71.49 +2.9% 150.00 +3.2% Net sales (billions of yen) 134.1 +2.3% 282.0 +3.1% Operating income 2.6 +2.2% 9.0 +27.8%

Asahi Food and Healthcare Co., Ltd.

◆ Accelerate growth strategies and structural reform ・Achieved significant sales growth due to strong sales of Mintia, Balance Up and other mainstay products as well firm sales in mail-order business ・Achieved profit targets despite up-front investment in advertising during second quarter ⇒Bolster mainstay brands, expand mail-order business and pursue further streamlining

Wakodo Co., Ltd.

◆Strengthened Base for Growth Targeting Higher Profitability ・Expanded core businesses (milk powder for infants, baby food) through enhanced differentiation based on new value-added features ・Sales and profits increased, reflecting reduced raw materials costs and high-profit-margin products’ increased share of sales ⇒ Step up brand enhancement efforts based on the “best for baby” brand strategy

Amano Jitsugyo Co., Ltd.

◆ Working to Establish Strong Position in Freeze-dried Food Products Market (Formed capital and business tie-up in June 2008) ・Achieved higher sales and profits reflecting strong mail-order business and SCM cooperation throughout the entire Group ⇒ Expand scope of collaboration with other Group companies, work on product development and build an optimal production and sales framework 11

Chinese beer business ◆ Failed to meet targets due to delay of Yantai Beer’s earnings structure reforms and increased competition with major beer companies ⇒Aim to achieve targets for Yantai Beer by getting back on schedule with licensed production of Tsingtao beer ⇒Aim to improve profitability by bolstering cost controls at each company and expanding the alliance with Tsingtao Brewery Haitai Beverage of South Korea ◆ Streamlined fixed costs by consolidating manufacturing plants and sales offices ◆Failed to meet targets due to the weak won driving up raw materials prices and a decline in sales of the core Sunkist brand ⇒Reform earnings structure, e.g., by curbing raw materials cost increases and reducing fixed costs ⇒Aim for steady rise in profitability by renewing the core Sunkist brand and launching new products

New Business Investment ◆ Made Schweppes Australia a wholly-owned subsidiary, completed investment in Tsingtao Brewery Co. ⇒Schweppes: Accelerate growth of overseas soft drink business in Australian market where stable growth can be expected ⇒Tsingtao Brewery Co.: Strengthen base for Chinese beer business by building strategic partnerships 12

Tingyi-Asahi-Itochu Beverages Holding Co. Ltd. (equity-method subsidiary)

◆ Support for stronger performance: Production technology, financial management, support for strategy building, etc. ◆ Success in category strategies focusing on tea and bottled water (No. 1 in both tea and water) ◆ Steadily expanded both sales and profits by streamlining costs and actively investing in advertising and promotion

⇒Support additional growth through technological collaboration and by expanding scope of collaboration, e.g., to include marketing etc.

■ Tingyi sales in the beverages segment ■ Sales breakdown and market share (US$ millions) No.1

Market share: Bottled Investment 22.0%← water 23% from Asahi No.1 Breweries No.3 Tea 1,924 YoY137% Fruit beverages 60% 1,519 Market share: Juice ↓ 17% → Market share: 1,093 15.5%← 44.5% 702 479 525 Source: Market composition based on value of sales for Jan.-Dec. 04年 05年 06年 07年 08年 09年1Q Market share: AC Nielsen (July 2008-June 2008) 13

◆ Breakdown of acquisition costs (billions AUD) Amount 備考 Total Investment 1,176 1AU＄＝68yen（date of acquisition）

Goodwill and amortization of 1AU＄＝68yen（date of acquisition） intangible assets 716 Amortize over 4-20 years depending on itme.

*We are currently finalizing the acquisition; changes may be made

◆ 1H 2009 results and 2009 target (*billions of yen , Comparisons with previous year are based on AUD) 1H results 2-4Q target Ref. full-year YoY Net sales 12.3 44.6 60.3 +8% Operating income (0.4) 2.3 3.7 +4% Goodwill, amortization of intangible assets (0.8) (2.4) (3.2) - Impact on financial performance for the fiscal year (0.7) (0.7) (0.7) - *Effect of marking inventory to market when assessing the value of goodwill ◆ Schweppes Australia Future Strategy 1. Aim for growth that exceeds growth rate in Australian soft drink market, focusing on bolstering the carbonatecarbonatedd beverages business ・ Launch Monster in the energy drink market, the No.1 new product in the U.S. ・ Leverage product development technologies and know-how to develop new brands and new categories 2. Leverage Asahi Breweries Group’s know-how to increase efficiency of SCM and to rebuild sales strategy ・ Promote higher manufacturing efficiency by introducing production and quality management technologies, and raise distribution efficiency by consolidating distribution bases ・ Enhance sales towatowardsrds the commercial-use market as well as the CVS and general store channels, which were a low priority before the acquisition 14

◆Capital Relationship with Tsingtao Brewery Co. Tsingtao Brewery performance trends

(million yuan) (million yuan) Yantai Beer Tsingtao Asahii 51％ Operating profit Net income Net sales 39％ Total acquisition cost 15,781 USD666.5 million 1,200 16,000 (approximately 65.0 billion yen) 13,530 14,000 1,000 19.99％ 11,677 1,179 12,000 10,020 ％ 800 29％ 51 1,007 10,000 7,703 Shenzhen Tsingtaobeer Asahi 600 6,714 8,000 6,195 654 *Percentages indicate equity stakes 579 6,000 561 ◆ Heading towards the conclusion of a comprehensive 400 520 526 734 539 4,000 alliance 448 200 245 222 307 2,000 1. Improve profitabilitprofitabilityy of existingexisting beer business in China 285 →Scheme for receiving OEM orders and providing sales 0 0 outsourcing, joint procurement of ingredients 2002 2003 2004 2005 2006 2007 2008

2. Support Tsingtao Brewery’s growth strategy →Cooperation and support in manufacturing technology, quality management, and asset management

3. Raise the presence of the Asahi Beer brand in China →Consider business development leveraging Tsingtao Brewery’s manufacturing bases and sales network 15

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