Anheuser-Busch, Chilean brewer CCU, South American soft drink bottler Baesa form beer partnership in Argentina.

ST. LOUIS--(BUSINESS WIRE)--Dec. 14, 1995--World's largest brewer Anheuser-Busch Companies, Inc. (NYSE: BUD), leading Chilean brewer Compania Cervecerias Unidas S.A. (CCU; NASDAQ:CCUUY) and Buenos Aires Embotelladora S.A. (BAESA; NYSE:BAE; BSE:BAES), PepsiCo's South American superbottler, today announced a strategic alliance for the growing Argentine beer market.

The three-way partnership combines Anheuser-Busch's world-famous Budweiser brand, BAESA's strong distribution network and CCU's local brewing expertise and management experience to build a leading brewing presence in Argentina.

The agreement calls for CCU-Argentina, CCU's wholly owned subsidiary in Argentina, to begin brewing Budweiser under license at its brewery in Santa Fe, Argentina, beginning late next year. Anheuser-Busch will also purchase a small initial minority stake in CCU-Argentina, with options to increase its holdings to 20 percent in the future.

Anheuser-Busch will oversee marketing support for the Budweiser brand in Argentina through a locally assigned brand manager and will provide technological and global marketing expertise.

"This partnership combines the strong international Budweiser brand with one of the strongest distributors in Argentina and CCU s local management and extensive experience to create a great growth opportunity for CCU," said Francisco Pirez Mackenna, CEO of CCU.

BAESA, one of the largest bottlers of Pepsi-Cola outside the United States, will distribute Budweiser and the CCU-Argentina brands through its extensive distribution network in Argentina. The alliance with BAESA is Anheuser-Busch's first with a major international distributor as the brewer builds its Budweiser business globally.

"The partnership with CCU and Budweiser allows BAESA to diversify its revenue stream while leveraging its extensive distribution network," said Charles H. Beach, chairman and CEO of BAESA. "The additional volume provided through Budweiser will allow BAESA to increase coverage for all of its products in the Buenos Aires region."

The Budweiser brand has developed a strong following in the Argentine beer market since it was introduced five years ago on an export basis.

"This partnership will give Budweiser an excellent production and distribution base in a market where it has already performed well as an import," said Jack H. Purnell, chairman and CEO of Anheuser-Busch International, Inc. "Our two partners and Anheuser-Busch each make unique contributions to the joint venture -- the Budweiser trademark, marketing skills, production and operating skills, market familiarity and distribution. This is a winning combination that should prosper in the Argentine beer market."

As part of the agreement, the Budweiser brand will also be distributed in Chile through CCU, which holds a leading 87 percent share of the Chilean beer market.

The partnership also calls for the two brewers to explore cooperative efforts in barley growing, agricultural research, can making and other beer-related activities in Argentina and to explore joint opportunities in other key South American markets.

Argentina is a growing beer market, with a per capita consumption of 35 liters per year, well behind the United States level of 90 liters per year. From 1988 to 1994, the Argentine beer industry achieved record growth, averaging 13 percent annually. In 1994, the country consumed 11 million hectoliters of beer. The industry suffered several months of decline in 1995 due to recessionary conditions, but is already rebounding and is expected to experience long-term growth.

Anheuser-Busch Companies, Inc.

Anheuser-Busch, based in St. Louis, holds a leading 9 percent share of the world beer market and a leading 45 percent share of the U.S. beer market. In 1994, it sold a record 88.5 million barrels of beer, a 1.4 percent increase over the previous year and the 18th consecutive year of record sales. With sales in more than 70 countries, Anheuser-Busch is the leading exporter of beer from the United States, accounting for about 43 percent of all U.S. beer exports. Anheuser-Busch International, Inc. is a subsidiary of the parent company, Anheuser-Busch Companies, Inc., and is responsible for the company's foreign beer operations and for exploring and developing beer markets outside of the United States. Its activities include overseas brewery management; contract- and license-brewing arrangements; exports, sales, marketing and distribution of the company's beers in foreign markets; and equity partnerships with leading foreign brewers.

CCU

Established in 1902 and based in Santiago, Chile, CCU is a diversified beverage company with interests in beer, soft drinks and wine. Its majority shareholders are the Luksic Group and Paulaner Brauerei A.G. and its stock trades as an ADR on the NASDAQ. CCU entered the Argentine beer market in 1995 with the acquisition of two existing breweries.

During the first half of 1995, CCU-Argentina purchased a 62.7 percent stake in Compaqma Industrial Cervecera S.A. (CICSA), a small brewery in Salta. The Salta brewery has an annual production capacity of 374,000 hectoliters and produces the regional "Salta" beer brand.

In September 1995, CCU-Argentina acquired Cervecerma Santa Fe. The Santa Fe brewery produces two popular Argentine brands, "Schneider" and "Santa Fe," and has a production capacity of approximately 1.1 million hectoliters. As a result of the two acquisitions, CCU- Argentina is now the second-largest brewer in Argentina, with a total 1995 market share of approximately 8 percent. The inclusion of a major international beer brand is a great strategic advantage for CCU-Argentina. CCU-Argentina plans to expand its Santa Fe capacity to approximately 3 million hectoliters within the next two years in order to brew Budweiser and meet the growing beer demand in Argentina. Total accumulated investment in Argentina by the year 2000 is expected to be US $350 million. With a total population of approximately 34 million in Argentina and per-capita consumption exceeding Chile's 28 liters, the expansion into Argentina offers CCU a beer market three times the size of Chile's.

The CCU-BAESA venture in Argentina represents a growing alliance between the two companies. "The relationship began with the 1994 ECUSA joint venture created for the production and distribution of soft drinks in Chile. After a year of successful operations, we are pleased to be expanding jointly in the neighboring country," said Fernando Sanchis, CEO of CCU-Argentina.

BAESA

With corporate offices in Boca Raton, Fla., BAESA is the largest Pepsi-Cola franchised bottler outside of the United States, based on net sales. The company holds the exclusive Pepsi and Seven-Up franchises for the Buenos Aires metropolitan area and other regions in Argentina, as well as Chile, Uruguay, Costa Rica and certain southern states in Brazil. BAESA owns an integrated, full-service distribution network in Buenos Aires and thereby offers access to a population of approximately 14 million.

In connection with the new alliance, BAESA will complement its existing Buenos Aires-area general trade (i.e., small retail establishments) distribution network, which will continue to distribute the company's PepsiCo brand soft drinks, by creating a second general trade network to handle the distribution of BAESA s juices, waters and isotonic products along with Budweiser beer. BAESA expects that this second network will be in place in late 1996. BAESA's existing supermarket and hypermarket distribution network will continue to handle its product line of Pepsi soft drinks, juices and waters and will distribute Budweiser beer and other CCU-Argentina brands.

CONTACT: Anheuser-Busch

Terri Vogt, [phone]

or

CCU

Magda Bodnar, [phone]

or

BAESA

Amy Figueroa, [phone]