Buenos Aires Embotelladora S.A. Acquires Franchise Rights to Majority of the Minas Gerais Region in Brazil; Reaches Agreement With PepsiCo for Financing Arrangements; Reports Second Quarter Preliminary Results.

BUENOS AIRES, Argentina--(BUSINESS WIRE)--May 3, 1995--Buenos Aires Embotelladora S.A. (BAESA; NYSE:BAE; BSE:BAES) today announced it has been granted the franchise rights to produce, distribute, and sell PepsiCo brands commencing in March 1996 in the majority of the state of Minas Gerais in Brazil. This expansion is consistent with BAESA's strategy of increasing its presence in the Latin American soft drink market.

Additionally, in a move to demonstrate the partnership between PepsiCo and BAESA, PepsiCo is advancing $49.4 million to BAESA to be repaid over a 5-year period through the equivalent of an increase in the price of concentrate purchased by BAESA's Brazilian franchise operations from PepsiCo. In exchange for the concentrate price increase, BAESA also announced today that it has finalized an agreement with PepsiCo, under which PepsiCo is providing a country risk guarantee to assist the Company in obtaining a $50 million credit facility on favorable terms from an international financial institution. The Company believes that this credit facility is the first 5-year loan provided to a Latin American borrower since the Mexican peso crisis in December 1994. Under this agreement with PepsiCo, BAESA was also granted the franchise rights for the majority of the Minas Gerais region in Brazil from PepsiCo.

The state of Minas Gerais, with an estimated 15.7 million consumers, is an important economic region, supporting a number of thriving automotive and other manufacturing plants. The Minas Gerais franchise territory includes Brazil's third largest city, Belo Horizonte, with a population of approximately 3.5 million. Estimated 1995 total soft drink industry sales volume for the state of Minas Gerais is approximately 107 million eight-ounce cases, with a per capita consumption of 164 eight-ounce servings. BAESA anticipates commencing operations in the new territory during the second quarter of fiscal 1996, and expects to begin building a bottling plant in the region in June 1995. In the coming months, BAESA also anticipates accelerating its entry into its existing Brazilian franchise territories in the entire state of Santa Catarina, the eastern portion of the state of Parana, and the interior region of the state of Rio Grande do Sul. These franchise territories are important for BAESA, as the South and Southeastern regions of Brazil represented approximately 80% of the Country's GDP in 1994.

BAESA's expansion into the southern Brazil region is an important step towards increasing the Company's presence in this rapidly growing market which represents approximately 55% of the Brazilian population. The acquisition of the majority of the Minas Gerais franchise region is consistent with the Company's strategy of entering underserved markets which possess favorable demographic trends.

Commenting on the coming expansion and the financing arrangements, Charles H. Beach, Chairman and Chief Executive Officer of BAESA commented, "The expansion into Minas Gerais is very exciting, given the attractive demographics of this growing and underserved market. We continue to see further opportunities for expansion throughout Latin America, and have the full backing of PepsiCo, as demonstrated by their support for this financing. This agreement with PepsiCo, coupled with the borrowing facility, will allow BAESA to refinance certain short-term debt and continue our expansion in Brazil and the Southern Cone."

BAESA also announced preliminary estimated results in U.S. dollars for the second quarter of fiscal 1995 (ended March 31, 1995). The Company expects to release full information regarding its second quarter results early next week. The preliminary estimated results for the second quarter of fiscal 1995 contained in this announcement are good faith estimates of expected results based on the Company's preliminary analysis of information regarding its operations during the quarter. Although the Company believes these estimates are substantially accurate, further analysis may require certain adjustments.

BAESA's total sales volume of eight-ounce cases in all of the Company's franchise territories in Argentina, Brazil, Costa Rica and Uruguay increased 45% to 40.4 million cases in the second quarter of fiscal 1995 compared to the second quarter of the previous year as a result of the addition of the new Brazil franchise areas. In Argentina, BAESA's sales volume of eight-ounce cases amounted to 29.1 million cases during the second quarter of fiscal 1995, compared to sales volume of 31.5 million eight-ounce cases on a proforma basis during the second quarter of fiscal 1994. In the southern Brazil franchise areas, BAESA's total sales volume of eight-ounce cases was 24.9 million cases during the second quarter of fiscal 1995, which was more than double the sales volume of 11.1 million cases achieved by the previous bottler during the comparable quarter of fiscal 1994. BAESA commenced bottling operations in southern Brazil in December 1994.

For the second quarter of fiscal year 1995, income from operations is expected to be $30.7 million for the consolidated Company, including $15.6 million in Argentina and $13.9 million in Brazil. During the second quarter of fiscal 1994, income from operations was $27.8 million for the consolidated Company, including $28.9 million in Argentina. Net income for the second quarter of fiscal 1995 is expected to range from $19 million to $20 million, compared to $18.8 million during the second quarter of fiscal 1994.

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. Effective 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: Buenos Aires Division

Rafael Farace, 011-541-925-3079

or

Dewe Rogerson Inc.

Amy Figueroa, 212/688-6840