BAESA to invest additional $400 million in Southern Brazil franchise territories over 3-year period.

BUENOS AIRES, Argentina--(BUSINESS WIRE)--May 16, 1995--Buenos Aires Embotelladora S.A. (BAESA) (NYSE:BAE) (BSE:BAES) today announced plans to invest an additional $400 million in its southern Brazil franchise territories between 1995 and 1997.

The company intends to invest heavily in developing its production and distribution facilities as well as in marketing expenditures to introduce new brands and packaging to increase per capita consumption and PepsiCo brand awareness in the southern Brazil region.

As previously announced in December of 1994, BAESA planned to invest approximately $400 million in capital assets and marketing expenditures to start-up operations in the five southern states of Brazil where BAESA commenced operations December 1, 1994. Under this first phase of BAESA's strategic plan in Brazil, the company has already constructed 3 plants with a total of 9 bottling lines, acquired distribution equipment and coolers and racks for selling purposes, and made marketing expenditures to develop its operations in its franchise territories of Rio de Janeiro, Sao Paulo, and Porto Alegre.

BAESA plans to continue investing in additional plants, bottling lines, distribution equipment, and marketing efforts as part of Phases II and III. During Phase II, the company will expand its operations throughout the five southern states of Brazil. Phase III will include the development of new franchise territories, principally the recently granted Minas Gerais area. Under Phases II and III, BAESA anticipates acquiring or building 5 production plants with 15 bottling lines and 26 sales centers. Under Phases II and III of BAESA's expansion plan, from the present until 1997, the company intends to invest an additional $400 million in capital assets and marketing expenditures.

Commenting on the investments, Ronald D. Barrett, president of Pepsi-Cola Engarrafadora Ltda., which is BAESA's wholly-owned Brazilian subsidiary, said, "We are firmly committed to the southern Brazil franchise territories, as demonstrated through our plans to develop our operations and to implement many new and innovative marketing strategies. We strongly believe that our southern Brazilian franchise territories, which encompass 70% of the Brazilian soft drink market, have an enormous potential for growth and that this investment will provide positive returns."

The Brazilian soft drink market is one of the largest in the world, with a current sales running rate of over 1.4 billion eight ounce cases annually. Per capita consumption of eight ounce servings per annum is relatively low by international standards. Low relative consumption levels combined with strong economic growth and a relatively stable currency, achieved through Brazil's Real Plan, make this market very attractive for BAESA's expansion.

BAESA is the largest Pepsi-Cola bottler outside of the United States, with the exclusive Pepsi and Seven-Up franchises for the Buenos Aires metropolitan area and other regions in Argentina, as well as Chile, Uruguay and Costa Rica. Since December 1, 1994, BAESA also became the exclusive Pepsi and Seven-Up bottler in certain southern states of Brazil, including the metropolitan areas of Sao Paulo and Rio de Janeiro. In May 1993, BAESA became the first company from Argentina to list its securities on the New York Stock Exchange.

CONTACT: BAESA's Investor Relations Desk

Amy Figueroa, 212/688-7930