Altadis: Special Central Works Council Meeting in France.

Business Editors

PARIS--(BUSINESS WIRE)--Feb. 20, 2004

The Seita Central Works Council held an additional Special Meeting today at the Paris headquarters of the Altadis Group. The meeting agenda included a review of the Company's written responses to the expert evaluation report submitted by Secafi Alpha concerning the planned restructuring of the Group's businesses and its impact in France, as well as a discussion of additional measures to be included in the employee support program presented at the last Central Works Council Meeting.

Commenting on the responses to the Secafi Alpha report, Altadis Co-Chairman Jean-Dominique Comolli said that the restructuring project, which concerns both France and Spain, is designed to enable Altadis to confront the inevitable erosion in dark cigarette consumption, the foreseeable decline in tobacco use in Western markets and the consolidation and restructuring that is currently shaping the tobacco industry.

In discussing the report's recommendation that the Lille facility be maintained, management emphasized the faster decline in dark cigarette sales and again stated that maintaining three facilities in France would lead to an important handicap of competitiveness.

In addition, due to a significant drop in the volume of tobacco products supplied to tobacconists, particularly in Northern France, the French distribution operations are now too big and have to be consolidated in order to adjust network capacity to projected sales volumes.

Concerning the Tonneins processing and threshing Center and Secafi Alpha's proposal to reconvert the facility to hemp processing, management reiterated that the Group could not become involved in a project unrelated to any of its businesses, but that it was prepared to help finance a feasibility study for this type of business in the region, as part of a program to revitalize local employment.

In discussing the employee support program, Jean-Dominique Comolli also said that "Altadis management will devote the time and resources necessary to propose a solution for each employee concerned and each individual situation will be reviewed on a case-by-case basis."

In line with this position, the employee support program, based on internal transfers and outplacement support, has been expanded.

Accordingly, the role of the Outplacement Support and Monitoring Committee, created for this purpose with representatives of Altadis, employee unions and local Labor, Employment and Professional Training Departments (DDTE), will be expanded and its term will be extended to offer support that is more suited to individual situations.

In addition, the Group is creating more jobs to be filled by internal transfers. A total of 194 (versus 169 previously) such positions are now open at the Nantes and Riom cigarette plants, the Strasbourg cigar plant, the Orleans-les-Aubrais research center and the regional distribution centers.

Furthermore, 418 people, or 60% of those concerned, will be eligible for company-financed measures, either as part of a temporary work dispensation with payment equal to 70% of the base salary for employees between 50 and 55, or as part of early retirement for employees over 55.

In conclusion, Jean-Dominique Comolli stated that "Altadis management makes the firm commitment, as it has already done in the past, to recreate in each area affected by the program, in close collaboration with local authorities, at least as many jobs as are eliminated."

Altadis is committed to deploying initiatives to revitalize the economy of the affected regions by helping to attract new businesses to create jobs and by supporting the development of local companies. Managed by specialized firms and implemented over the long term (two to three years depending on the facility), this program will benefit from substantial funding. In this connection, dedicated resources will be allocated to facilitate the outplacement of Group employees in these regions.