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Brakspear Announces Future Strategy

Brakspear Chairman Mike Foster said:"N M Rothschild & Sons Ltd, supported by Ernst & Young on tax matters and Daniel Watney on property matters, has extensively reviewed our business to identify the best opportunities for the long term future of the Company. The process has concluded that we cannot continue to sustain the substantial losses incurred by the brewing operation. The brewing industry has seismic change in recent years which has seen the economics of brewing become increasingly difficult for vertically integrated companies such as Brakspear. Sales of Brakspear beer to our pub estate are in long-term gentle decline and although we have grown our Free trade sales volume, we are faced with ever increasing pressure for discounts and consequent margin reduction. The situation was not helped by the Chancellor Gordon Brown`s recent decision to exclude companies like Brakspear from the progressive duty tax break granted to smaller brewers.

The Henley brewery will close by the year end and there will be about 35 job losses. This decision has been a difficult one for a company with our heritage, but we must look to the future. It is our responsibilty to identify and implement the best way forward for shareholders and stakeholders. However, we belive we have identified an innovative solution to preserve the quality and consistency of our award winning beers. In a unique and progressive step we have developed a partnership with Refresh, the owners of Wychwood Brewery, who will handle the brewing, markeing and free trade sales of our beer brands under a comprehensive licence agreement.

Refresh have indicated that they are looking to establish a smaller specialist brewery to contiune brewing Brakspear beer.

We have met with CAMRA and are looking for them to work with us to support this new approach to ensure the quality and consistency of our beers are maintained. Brakspear intends to remain based in Henley on Thames and concentrate the future of its business around its pub and property estate in the Thames Valley. The ambitious plans we have for the development of our pub estate continue. Over 3m is to be spent on five major pub projects together with a number of other smaller schemes during the rest of 2002 and into 2003. Afurther seven projects are in the pipeline and we continue to seek new pubs to expand our licensed estate."

Rupert Thompson, Chief Executive of Refresh, said:"Wychwood and Brakspear have already been working successfully together in the very competitive Take Home beer market for the last three years. We are excited by the opportunity for even greater cooperation to preserve and develop the much-loved Brakspear brands. By transferring equipment and brewing expertise to a local brewery and continuing respect for the traditional brewing craft with a modern marketing approach, we can preserve these great beers for future generations."

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