1

Kirin Group Business Approach for 2007Taking a proactive, fast-moving stance in Kirin’s centenary year to mark the first year of

KV2015 Stage I and initiate a quantum leap in growth

KIRIN BREWERY COMPANY, LIMITEDJanuary 10, 2007

January 10, 2007 2©2007 KIRIN BREWERY COMPANY, LIMITED

1. 2007: Kirin Group Strategy – Basic Groupwide Policies

2007 2007 Kirin Group StrategyKirin Group Strategy

2010 Mid-term Plan(2010-2012)

2013 Mid-term Plan(2013-2015)

KV2015 KV2015 （（LongLong--term business framework)term business framework)

2007 2007 MidMid--term Planterm Plan(2007(2007--2009)2009)

KV2015 Stage I KV2015 Stage I ＝＝Plan to rapidly realize the longPlan to rapidly realize the long--term goals of KV2015term goals of KV2015

2007 marks Kirin’s centenary and the start of KV2015 Stage I. We intend to reform our corporate structure, pursue initiatives aimed at raising KIRIN brand value and maximize corporate value to initiate a quantum leap in growth.

200720072007

Build further customer Build further customer support for Kirinsupport for Kirin’’s s domestic alcohol domestic alcohol

businessbusiness

Accelerate initiatives in the overseas Accelerate initiatives in the overseas alcohol, pharmaceutical and health and alcohol, pharmaceutical and health and

functional foods businesses and functional foods businesses and pursue a comprehensive Group pursue a comprehensive Group

beverages strategybeverages strategy

Implement CSR Implement CSR GroupwideGroupwide

January 10, 2007 3©2007 KIRIN BREWERY COMPANY, LIMITED

Focus on Asia and Oceania. In the growing Chinese market expand Focus on Asia and Oceania. In the growing Chinese market expand business business in each area and consider new partnerships. Develop business in in each area and consider new partnerships. Develop business in ASEAN ASEAN countries.countries.

Pursue autonomous growth in the three

target regions of China

Pursue autonomous Pursue autonomous growth in the three growth in the three

target regions of Chinatarget regions of China

● Yangtze River Delta: Start production of Kirin brands at HangzhouQiandaohu Brewery Co.

● Pearl River Delta: Start production at new Kirin (Zhuhai) brewery● Three Northeast provinces: Expand sales of Zui Qilin

Expand Groupsynergies

Expand GroupExpand Groupsynergiessynergies

● Implement technology exchange between Group companies andtraining to develop local staff

● Coordinate with Lion Nathan and San Miguel● Reduce raw material costs through joint procurement, consider

item expansion for joint procurement

Grow sales volumeGrow sales volumeGrow sales volume2007 Overseas beer sales targets● KIRIN brand: 54,496 KL(+28.3%)● Non-KIRIN brand: 1,456,964 KL（+5.6%)

2. 2007: Kirin Group Strategy – Overseas alcohol business

Overseas alcohol businessOverseas alcohol business

January 10, 2007 4©2007 KIRIN BREWERY COMPANY, LIMITED

Accelerate Kirin Accelerate Kirin pharmapharma growth by expanding share in renal treatments, growth by expanding share in renal treatments, strengthening development pipeline and pursuing global growth. Astrengthening development pipeline and pursuing global growth. Aim to im to become a global specialist become a global specialist pharmapharma company.company.

Maintain and strengthenbusiness base

Maintain and strengthenMaintain and strengthenbusiness basebusiness base

●Launch KRN321●Seek approval of KRN1493●Create 500-strong MR team

Create global products

Create global Create global productsproducts

●Consider business tie- ups●Pursue licensing

Pursue overseas growth

Pursue overseas Pursue overseas growthgrowth

●Apply for drug approvals in Vietnam, Indonesia, the Philippines

●Start U.S. development

Strengthen pipeline and operationsStrengthen pipeline and operations

Penetrate ASEAN and U.S. marketsPenetrate ASEAN and U.S. markets

2007 initiatives2007 2007 initiativesinitiatives

Further strengthen areas of Further strengthen areas of core competence (Renal/Cancer)core competence (Renal/Cancer)

3. 2007: Kirin Group Strategy – Pharmaceutical business

Pharmaceutical businessPharmaceutical business

January 10, 2007 5©2007 KIRIN BREWERY COMPANY, LIMITED

Aim for sales of Aim for sales of ¥¥20bn in 2009. Strengthen the Health/Functional Foods 20bn in 2009. Strengthen the Health/Functional Foods Business as the GroupBusiness as the Group’’s fourth pillar, centered on Kirin Yakult s fourth pillar, centered on Kirin Yakult NextStageNextStage Co. Co.

Kirin YakultNextStage Co.Kirin YakultKirin Yakult

NextStageNextStage Co.Co.● Inherit core businesses of Kirin Well-Foods from 1/1/07● Develop and sell follow-up products to BBcube

Takeda-Kirin Foods Corp.

TakedaTakeda--Kirin Kirin Foods Corp.Foods Corp.

Kirin AgribioKirin Kirin AgribioAgribio

● To become 100% Kirin subsidiary from April 1, 2007—Kirin Food Tech● In 2007 start full-scale production at new Indonesian factory

● Focus resources on seedling business● Establish Kirin Agribio Floricultural Development Center (provisional

name) in 2007

4. 2007: Kirin Group Strategy – Health/Functional foods; Other

Health/Functional Foods BusinessHealth/Functional Foods Business

Seasonings/Seasonings/AgribioAgribio BusinessesBusinesses

January 10, 2007 6©2007 KIRIN BREWERY COMPANY, LIMITED

Kirin Group CSR ActivitiesKirin Group CSR ActivitiesKirin Group CSR Activities

Further strengthening compliance and risk management Groupwide● Formulated Group compliance guidelines● Groupwide risk management as the basis

of internal controls

Food safety and securityStrengthen quality management

and controlImprove information disclosure

　　Sports sponsorshipSupport for Japan’s national

soccer and Olympics teams

Responsibilities as an alcohol beverage company

　 Promoting food cultureConducting a broad range of study and research, providing information on food and lifestyle cultureInitiatives in beer and tea culture

Environmental initiativesFurther reductions in CO2 emissions Preserving water purity

ＳＴＯＰ！Underage drinking prevention logo

Ecojiro-Kirin’s mascot for environmental eactivities

Increased trust by society

Kirin Group activities

●Renewed contract as sponsor of Japan’s national soccer team

●Formulate basic Group environmental policy

●Team Ecojiro activities

5. 2007: Kirin Group Strategy – CSR

Implementing CSRImplementing CSR GroupwideGroupwide

Promote responsible drinking Help prevent underage drinking, reduce drunk driving, warnings on drinking during pregnancy

January 10, 2007 7©2007 KIRIN BREWERY COMPANY, LIMITED

8

2007 – Domestic alcohol business strategy～Meeting needs by staying closest to our customers～

January 10, 2007

January 10, 2007 9©2007 KIRIN BREWERY COMPANY, LIMITED

1. Review of 2006 (Overall market)　

　■ Beer （-2% approx.)　　・Fourth consecutive year of single digit decline　　・Premium segment grew by around 5 to 7%

　■ Happo-shu （-10% approx.)　　・Strong support in home-use market　　　・Market supported leading brands and

distinctive brands

　■ New genre (+22% approx.)　　・Further market growth. Now around 20% of

combined category

　■ Chu-hi （+1% approx.)　　・Growth in this market slowed

Slight decline in combined beer, Slight decline in combined beer, happohappo--shushu,,new genre market (new genre market (--1% approx.)1% approx.)

Affected by declining/aging population, diversifying tastes, tax revisions

Combined beer + happo-shu +new genre market

Combined beer + Combined beer + happohappo--shushu ++new genre marketnew genre market

Kirin estimates; Unit = 10,000 cases

0

10,000

20,000

30,000

40,000

50,000

60,000

2000 2001 2002 2003 2004 2005 2006

New genre

Happo-shu

Beer

January 10, 2007 10©2007 KIRIN BREWERY COMPANY, LIMITED

●　●　Strongly outperformed the industry; 2Strongly outperformed the industry; 2ndnd consecutive year of growthconsecutive year of growth●　●　Further strong performance from Further strong performance from Kirin Kirin NodogoshiNodogoshi ofof +39.4%; achieved new +39.4%; achieved new

genre sales targetsgenre sales targets●　●　Strongly outperformed industry in Strongly outperformed industry in happohappo--shushu with +3.5 % growth, driven bywith +3.5 % growth, driven by

hit product hit product Kirin Kirin EnjukuEnjuku and growth inand growth in TanreiTanrei Green LabelGreen Label

Key pointsKey pointsKey points

Total beer + Total beer + happohappo--shushu + new genre sales: + new genre sales: 187.1 million cases 187.1 million cases （（+4.8%+4.8%））

　■■ Beer: 79.70 Beer: 79.70 million casesmillion cases ((--5.6%)5.6%)

　■　■ HappoHappo--shushu: 68.50 : 68.50 million casesmillion cases (+3.5%)(+3.5%)

　■　■ New genre: 38.90 New genre: 38.90 million casesmillion cases (+39.4%)(+39.4%)　　　　

　■　■ ChuChu--hi: 37.50 hi: 37.50 million casesmillion cases (+3.9%)(+3.9%)　　　

Kirin: Total sales volume of beer + happo-shu + new genre

Kirin: Total sales volume of beer + Kirin: Total sales volume of beer + happohappo--shushu + new genre+ new genre

*Figures for beer, happo-shu and new genre represent cases of large bottles (I case = 12.66 liters). Figures for chu-hi represent cases of 250ml cans (I case = 6 liters)

Unit= 10,000 cases

2. Review of 2006 (Kirin)

17,200

17,400

17,600

17,800

18,000

18,200

18,400

18,600

18,800

2004 2005 2006

January 10, 2007 11©2007 KIRIN BREWERY COMPANY, LIMITED

3. 2007: Domestic Alcohol Business—Basic strategy

Marketing focus on the diversity of customer needsMarketing focus on the diversity of customer needs

5 + 15 + 1 basic strategic issuesbasic strategic issues

……..and become the company most supported by and become the company most supported by customerscustomers

　Plus One: Reform corporate organization and culture

55．．Enhance Enhance CSRCSR

22．．No. 1 in No. 1 in beer drinks beer drinks

(beer, (beer, happohappo--shushu, , new genre)new genre)

33．．Expand Expand RTD, RTD,

shochushochuand wineand wine

44．．Improve Improve costcost--

competitcompetit--ivenessiveness

1．Establish and enhance customer-focused marketing model

January 10, 2007 12©2007 KIRIN BREWERY COMPANY, LIMITED

4. 2007 Kirin beer sales targets

BeerBeer83.40m cases (+4.6%)83.40m cases (+4.6%)

HappoHappo--shushu70.90m cases (+3.5%)70.90m cases (+3.5%)

New genreNew genre43.10m cases (+10.8%)43.10m cases (+10.8%)

ChuChu--hihi34.6m cases (34.6m cases (--7.7%)7.7%)

Targeting a Targeting a large increase in sales of 5.6%large increase in sales of 5.6% vs. forecast industry decline of around 1vs. forecast industry decline of around 1％％Aiming for turnaround in beer. Launching next generation new proAiming for turnaround in beer. Launching next generation new product,duct,strengthening existing and premium brandsstrengthening existing and premium brandsHappoHappo--shushu——Sustaining No. 1 positionSustaining No. 1 position through leading brands and distinctly through leading brands and distinctly individual brandsindividual brandsNew genreNew genre——Reinforcing No. 1 position by Reinforcing No. 1 position by strengthening and renewing brandsstrengthening and renewing brands

Key pointsKey Key

pointspoints

Target total beer + Target total beer + happohappo--shushu + new genre sales + new genre sales of 197.5 million cases (+5.6%)of 197.5 million cases (+5.6%)

*Figures for beer, happo-shu and new genre represent cases of large bottles (I case =12.66 liters). Figures for chu-hi represent cases of 250ml cans (I case = 6 liters)

January 10, 2007 13©2007 KIRIN BREWERY COMPANY, LIMITED

5. 2007 Domestic alcohol business– Product strategy (Beer, happo-shu, new genre)

①In happo-shu and new genre, meet customer needs for a balance of quality and taste and strengthen Kirin’s core value proposition.

② In the beer category, where consumers increasingly expect products to reflect their different lifestyles and tastes, strengthen provision of Kirin-style value-added proposals.

③Lead the market by encouraging differentiation of customer lifestyle (health) and taste needs in the happo-shu market

①In happo-shu and new genre, meet customer needs for a balance of quality and taste and strengthen Kirin’s core value proposition.

② In the beer category, where consumers increasingly expect products to reflect their different lifestyles and tastes, strengthen provision of Kirin-style value-added proposals.

③Lead the market by encouraging differentiation of customer lifestyle (health) and taste needs in the happo-shu market

New

リニューアル

リニューアル

新広告キャンペーン

No.1

No.1

Beer

Happo-shu

New genre

Dem

and

for b

alan

ce o

f qua

lity

and

pric

eLifestyle and taste preferences

Renewal

Renewal and newadvertisingcampaign

Health conscious Taste conscious

Enhance loyalty Refine image

Full yearof can sales

Refine image+new products

New product

Position ofprevious stapleproducts

January 10, 2007 14©2007 KIRIN BREWERY COMPANY, LIMITED

Demand for fashion and modernity in alcoholDemand for fashion and modernity in alcohol

Lifestyle demand for lightness and sw

eetnessLifestyle dem

and for lightness and sweetness

Bottled RTD zone—favorite tastes, ingredients

Beer beverages

Standard zone (refreshing, healthy)

Shin Lu Shin Lu ChuChu

Two DogsTwo Dogs

HyoketsuHyoketsuHayazumiHayazumi(50% less(50% less

sugar)sugar)

● Strengthen the position of Hyoketsu as the axis of the standard zone and boost new areas to meet you new preferences.

●　Link with Mercian.●　Introduce open pricing and new voluntary guidelines.

● Strengthen the position of Hyoketsu as the axis of the standard zone and boost new areas to meet you new preferences.

●　Link with Mercian.●　Introduce open pricing and new voluntary guidelines.

Mercian products

HyoketsuHyoketsu StandardStandard

Lifestyle performance

zone（relaxation, openness)

HyoketsuHyoketsuPremiumPremium

Sweet taste zoneSweet taste zone（（sweetness, variety)sweetness, variety)

6. 2007 Domestic alcohol business– Product strategy (RTDs)

January 10, 2007 15©2007 KIRIN BREWERY COMPANY, LIMITED

Standard rangeB type/Major products

Premium rangeB type/

Regional specialties

Low-priced rangeMixed/A type

Shochu Wine SpiritsMercian product lineup+ Kirin product lineup

Aim for categoryAim for categoryleadershipleadership

Marketing based on price bandsMarketing based on price bands

Strengthen market presence around three core brands

Chivas RegalFuji-SanrokuFour Roses

…and further developbrands in the spirits and liquor markets

● Kirin + Mercian = Creation of a new product portfolio● Strengthen comprehensive alcohol business

● Kirin + Mercian = Creation of a new product portfolio● Strengthen comprehensive alcohol business

● Concentrate resources● Enhance comprehensive

alcohol business

● Concentrate resources● Enhance comprehensive

alcohol business

MercianproductsMercianproducts

7. 2007 Domestic alcohol business–Product strategy (shochu, wine, spirits)

January 10, 2007 16©2007 KIRIN BREWERY COMPANY, LIMITED

8. 2007 Domestic alcohol business—Sales strategy

Closest to our customersClosest to our customersClosest to our customers

Further promote value marketingFurther promote value marketing

● Match proposals to diverse customer scenarios

● Promote fair trading based on a cost-plus mindset

Realize Realize ‘‘Impressive qualityImpressive quality’’

● Cooperation with Kirin top ranked outlets, Kirin Manten Nama No Mise

●Stronger ties with KCS

Enhance Enhance Team Team KirinKirin

● Factories, distribution and sales divisions each to implement ‘close to the customer’ activities

● Sales approach tailored closely to each region

Form bonds Form bonds with customerswith customers

● Implement centenary initiatives

● Undertake soccer-related activities

Note: As of end Nov. there were 1,700 Kirin top-ranked Outlets, Kirin Manten Nama No Mise.

Note: As of end Nov. there were 1,700 Kirin top-ranked Outlets, Kirin Manten Nama No Mise.

January 10, 2007 17©2007 KIRIN BREWERY COMPANY, LIMITED

9. 2007—Enhancing Kirin’s production base

Hokuriku Plant (Medium/large volume plant)• Main plant for Hokuriku region• Insourcing of soft drinks production　Expand brewery capacity

Tochigi Plant (Small volume, multi-product)• Chilled, etc., small volume production• Commence RTD production

Fukuoka Plant (Medium/large volume plant)•Main plant for Kyushu region•Completed renewal in Dec. 2006

Toride Plant (Medium/large volume)Main plant for Tokyo metropolitan regionExpand brewery capacity Increase canning line capacity　

Sendai Plant (Medium/large volume)• Main plant for Tohoku region• Expand brewery capacity

Chitose Plant (Medium/large volume plant)• Main plant for Hokkaido region

Yokohama Plant (Medium/large volume)Main plant for Tokyo metropolitan regionExpand brewery capacity

Nagoya Plant (Medium/large volume plant)• Main plant for Tokai regionExpand brewery capacityIncrease canning line capacity

Shiga Plant (Small volume, multi-product plant)• Chilled, etc., small volume production• Insourcing of soft drinks production

Kobe Plant (Medium/large volume plant)Main plant for Kansai regionExpand brewery capacity

Okayama Plant (Medium/large volume plant)• Main plant for Chugoku/Shikoku regionExpand brewery capacity

Brewing research & Packaging research & Product development research

　Expand pilot plant

●Create an efficient manufacturing organizationwith two factory types nationwide

　　　　Medium/Large volume plant　　　　

Small volume, multi-product plant

●Enhance stable product supply• Expand brewery capacity (Sendai, Toride, Yokohama, Nagoya,

Hokuriku, Kobe, Okayama)

• Increase canning line capacity (Toride, Nagoya)

• Enhance personnel foundations (Increase recruitment, improve staff training)

●Strengthen new product development and production

・Expand brewing research pilot plant・Expand domain of core technology as comprehensive

alcohol Group （technology exchange with Mercian)

January 10, 2007 18©2007 KIRIN BREWERY COMPANY, LIMITED

10. 2006 sales volumes and 2007 targets

Kirin 2006 actual % change

Beer -5.6%+3.5%

New genre ３,８９０ +39.4% ４,３１０ +10.8%Beer+ Happo-shu+ New genre １８,７１０ +4.8% １９,７５０ +5.6%

Chu-hi total ３,７５０ +3.9% ３,４６０ -7.7%

2007 target %change

Happo-shu７,９７０６,８５０

+4.6%+3.5%

８,３４０７,０９０

Industry (four companies) 2006 estimate % changeBeer -2% approx.

-10% approx.New genre +22% approx. +6% approx.

Beer+ Happo-shu+ New genre -1% approx. -1% approx.Chu-hi total +1% approx. +2% approx.

2007 forecast % change

Happo-shu-2% approx.-4% approx.

★Lager brands total ３,５００ -10.9% ２,８９０ -１７.４％

　　　Lager ２,８１０ -9.9% ２,３７０ -１５.７％

　　　Classic Lager ６９０ -13.8% ５２０ -２４.６％★Ichiban Shibori total ４,０２０ -3.4% ４,０５０ ＋０.７％　　　Ichiban Shibori ３,９１０ -4.2% ３,８４０ -１.８％★Kirin The Gold － － ８００ －

★Bottled chilled beer total ６８ +70.0% １４２ ＋１０８.８％

★Nodogoshi (draft) ３,８９０ +39.4% ４,３１０ ＋１０.８％

★Tanrei brand total ５,７７０ -7.4% ５,９７０ ＋３.５％　　　Tanrei (draft) ３,７４０ -13.2% ３,８４０ ＋２.７％　　　Tanrei Green Label １,８００ +7.8%　　　Tanrei Alpha -4.0%

－

+2.2%

★Enjuku brand total

１,９００ ＋５.６％

★Hyoketsu total

２４０

９００

３,６８０

±０.０％＋１４.４％

-９.５％

２４０

１,０３０

３,３３０

Unit: 10,000 cases

Unit: 10,000 cases

Industry forecasts (four main companies) are as estimated by Kirin

Industry forecasts (four main companies) are as estimated by Kirin

*Figures for beer, happo-shu and new genre represent cases of large bottles (I case =12.66 liters). Figures for chu-hi represent cases of 250ml cans (I case = 6 liters)

January 10, 2007 19©2007 KIRIN BREWERY COMPANY, LIMITED