Coca-Cola Enterprises Inc. Provides Update On Nonrecurring European Product Recall Charges.

ATLANTA--(BUSINESS WIRE)--July 12, 1999--

Coca-Cola Enterprises Inc. reported today that it has fully assessed the nonrecurring costs associated with the June 1999 product recall in certain parts of Europe. Returns of product to the Company are virtually complete and estimated costs of product disposal have been finalized. As a result, the Company now estimates that the nonrecurring costs relating to the product recall will be approximately $103 million in the second quarter of 1999. The Company is investigating potential reimbursement by insurance or third parties; however, expected second-quarter 1999 results will not include any potential reimbursement.

"The Belgian product recall is an extraordinary event in the history of a company whose foremost priority has always been the production of the highest quality products," said Henry A. Schimberg, president and chief executive officer of Coca-Cola Enterprises Inc. "Our commitment to quality continues to be the foundation of our business."

Mr. Schimberg continued, "Resolving this issue in a comprehensive and responsible fashion reflects our commitment to do the right thing for our consumers, customers, the government agencies, our employees, and our share owners."

The increase in the nonrecurring charge is partially due to higher product returns as a result of greater than anticipated inventory in consumers' homes. In addition, disposal costs increased because of the larger quantities of product destroyed and the estimated per case cost of disposal which reflects the extraordinary quality control procedures that will be used for product destruction. The Company currently estimates that approximately 17 million unit cases of product were impacted by the product recall, representing substantially less than 1 percent of the Company's total annual volume. In addition to the nonrecurring costs of the recall, there will be a negative impact on sales, cash operating profit, and earnings per share in the second quarter of 1999 in the affected countries as a result of lost sales.

"The unexpectedly high level of in-home product inventory returned speaks to the popularity and penetration of our brands. This popularity gives us confidence that, as we continue to work closely with our customers and the government authorities to finalize these issues, we will be successful in restoring the full faith and confidence of consumers throughout Europe," said Mr. Schimberg. "We remain confident that the situation will not materially affect financial results in the year 2000 and beyond."

Forward-Looking Statements 

Included in this news release are several forward-looking management comments and other statements that reflect management's current outlook for future periods. As always, these expectations are based on the currently available competitive, financial, and economic data along with the Company's operating plans, and are subject to future events and uncertainties. Among the events or uncertainties which could adversely affect future periods are any long-term impact on European sales related to the second-quarter 1999 product quality issues, lower-than-expected net pricing resulting from increased marketplace competition, an inability to meet performance requirements for expected levels of marketing support payments from The Coca-Cola Company, material changes from expectations in the cost of raw materials and ingredients, an inability to achieve the expected timing for returns on cold drink equipment and employee infrastructure expenditures, an inability to meet projections for performance in newly acquired territories, unexpected costs associated with Year 2000 compliance or the business risk associated with Year 2000 noncompliance by customers and/or suppliers, unexpected costs associated with conversion to the common European currency (the Euro), and unfavorable interest rate and currency fluctuations. The forward-looking statements in this news release should be read in conjunction with the detailed cautionary statements found on page 19 of the Company's 1998 Annual Report and in the Company's first-quarter 1999 Form 10-Q.

Coca-Cola Enterprises Inc. (NYSE: CCE) is the world's largest marketer, distributor, and producer of bottle and can liquid nonalcoholic refreshment. Coca-Cola Enterprises sells approximately 74 percent of The Coca-Cola Company's bottle and can volume in North America and is the sole licensed bottler for products of The Coca-Cola Company in Belgium, Great Britain, Luxembourg, the Netherlands, and most of France.