GRUPO MODELO.

A GLOBAL COMPANY WITH GLOBAL CUSTOMERS

From Santiago to Sydney, from Prague to Paris, Grupo Modelo is setting the benchmark for global companies whose goal is international market domination.

Smart merchandising, seamless distribution systems, a diversified array of products and a worldwide sales force have paid off for Grupo Modelo, which sees itself perennially listed among the top companies in Latin America.

More formally known as Grupo Modelo SA. de C.V., the Mexican company is the No. 1 exporter in a country that has become celebrated for expanding its outbound commerce. Its corporate mission: "To produce, distribute and sell quality beer, at a competitive price, optimizing resources and surpassing customer expectations, in order to contribute to the economic and social development of Mexico."

Grupo Modelo now ranks as the No. S brewer in the world. In the past two years, its Corona Extra brand has become the fifth best-selling beer worldwide and the No. 1 imported beer in the United States.

Grupo Modelo's diversified portfolio has attained 21 consecutive years of success in the international market. In 1998, Modelo saw an outstanding increase of 29.7% in its sales volume over 1997, setting a record with 6.5 million hectoliters exported. This represents 83.02% of all exported Mexican beer.

Valentin Diez Morodo, senior vice president and CEO for sales and marketing, notes that Modelo has been successful in spite of economic turmoil in Latin American markets, where other imported brands are being produced locally under license, and in global markets shaken by financial crises and political problems. Diez Morodo is widely recognized as the driving force behind Modelo's domestic and export success.

In the United States, Modelo's sales increased 37% in 1998 - establishing Corona Extra as the leading imported beer. Consider the competition: 450 other beer brands from around the world. Corona Extra outperformed its nearest competitor by more than 10 million cases.

In addition to Corona Extra, Modelo saw significant growth in sales volume with its other brands: Modelo Especial in bottles and cans grew 27.8%, Corona Light grew 44.5%, Pacifico 16.6% and Negra Modelo 21.4%.

Today, Modelo products are available in more than 140 countries, thanks to the sales efforts of the professional importers around the world and with the support of the company's distribution subsidiaries: Pamapromex (Mexico), Procermex (United States), Eurocermex (Belgium), Iberocermex (Spain), Asiacermex (Singapore and Korea), Latincermex (Costa Rica and Argentina) and the recently inaugurated Canacermex (Canada).

Each subsidiary is run by a team of top professionals who provide importers with sales and marketing support, helping them to establish Modelo products among the top imported beers in each country.

In the United States, Corona Extra and Modelo's other brands are handled by The Gambrinus Co. and Barton Beers Ltd.

All Modelo products are produced in Mexico, where the company's eight breweries have a total annual installed capacity of 39.5 million hectoliters. A new plant in the state of Zacatecas is the most modern brewery in the world and the largest in Latin America. Modelo produces 58.86% of all the beer made in Mexico, including both domestic and international markets. Total sales last year were 32.25 million hectoliters. Modelo also produces Light Modelo, Victoria, Estrella, Montejo and Leon Negra.

Grupo Modelo's emphasis on Total Quality programs is another benchmark of success. ISO 9000 and ISO 14000 programs were introduced last year to several distributorships in western Mexico. The goal is to have these systems in place throughout Mexico by next year.

For maximum efficiency, the company employs 42,000 people, with more than 695 strategically located distributors. Modelo's company-owned distributorships operate more than 10,000 vehicles, and the company is committed to continuous renewal and updating of equipment.

The company's convenience store division continued to expand in 1998, with store openings increasing by 10%. Because of Modelo's growth, the company continues to build new distribution centers in order to give more direct attention to its customers.

Grupo Modelo's international success continues around the world, as follows:

Canada -- Modelo made a new sales record in 1998, outselling its nearest competitor by two to one. Corona Extra sales were up 30% over 1997. A new Modelo subsidiary, Canacermex, will support the marketing efforts of importers because sales are increasing substantially.

Europe -- Subsidiary Eurocermex saw high growth rates in France, Italy and Greece. Germany had wide distribution, with growth in Bavaria and the North Sea area. Intense promotional activity paid off in London and Spain. Modelo also weathered economic and political turmoil in Eastern Europe, showing a 70% sales increase during the hot Russian August. Satisfactory results were also achieved in the Nordic countries, and Belgium, Austria, the Netherlands, Switzerland, Lebanon and Portugal saw higher sales.

Asia -- In Japan, Taiwan, Malaysia and China, sales were up more than 25%. In Thailand, Korea and Indonesia, Corona Extra held its market share, even though customer purchasing power was hurt by the economic crisis. In Australia, Corona Extra remains No. 1 among imported beers.

Central America -- Sales of Corona Extra were doubled in El Salvador, and Negra Modelo became the leader in the dark-beer segment. Innovative promotions boosted sales in Nicaragua. Panama, Costa Rica and Guatemala posted strong increases.

South America - Despite bleak economic conditions, Corona Extra kept its lead among imported beers in Colombia, Ecuador, Chile, Bolivia and Argentina. In Brazil and Argentina, Modelo faces tough competition because international brands are being brewed locally under license. In Venezuela, Corona Extra has positioned itself as the No. 1 premium imported beer in just two years, and Negra Modelo holds the lead in the dark-beer segment in Colombia. In Urugay and Paraguay, Corona Extra remains strong.

The Caribbean -- Corona Extra, available in most nations in the Caribbean, made substantial gains in market share.

In conclusion, the outlook for 1999 is bright. Already, Modelo has posted strong results -- indicating that the company's momentum is gaining. First quarter results showed a 14.2% increase in sales, and continued expansion into the U.S. market. Revenues reached US$132 million for the quarter, up significantly over 1998 same-quarter revenues of $89 million.

                         THE WORLD'S TOP 5 BRANDS

Ranking Brand           1997 shipments [*]
1       Budweiser              50.1
2       Bud Light              27.3
3       Brahma Chopp           21.9
4       Asahi Super Dry        21.7
5       Corona Extra           19.5

(*.)In millions of hectoliters

                TOP 5 IMPORTED BRANDS IN THE UNITED STATES

  Brand          1998 sales
1 Corona Extra       54,170
2 Heineken           43,085
3 Labatt Blue        11,080
4 Molson Ice          9,675
5 Guinness Stout      8,730

(*.)In thousands of 24-bottle cases of .355 ml units.

                   THE WORLD'S TOP 10 BREWING COMPANIES

COMPANY                               1997 SHIPMENTS        YEAR-TO-YEAR
                                (IN MILLIONS OF HECTOLITERS    GROWTH
1. Anheuser-Busch                         121.3                 4.3%
2. Heineken                                54.4                 4.4%
3. Miller Brewing Co.                      52.9                 0.9%
4. South African Breweries Ltd.            42.9                10.8%
5. Companhia Cervejaria Brahma             41.3                 7.9%
6. Interbrew                               36.7                 7.8%
7. Carlberg                                33.7                 4.3%
8. Grupo Modelo                              30                  9.5
9. Kirin Brewery Co.                       29.2                -10.1
10. Foster's Brewing Group                 28.7                   5%