Baltika                       NEWS RELEASE                      05/03/2004



HOLDING IN RUSSIAN RETAIL COMPANY



Baltika Group acquired holding in company operating on

Russian retail market



According to the contract signed on 20 April 2004,

Baltika will acquire a holding of 50.1% in OOO Kompania

BALTMAN RUS, a retail organization which operates on the

Russian market and coordinates the sale of the Baltika

Group trademarks, from 1 May 2004. The company is

currently operating eight shops in Moscow and St.

Petersburg, which sell the Baltika trademarks. The total

sales of the retail company are expected to be about EEK

40m (EUR 2,56m) in 2004.

As a result of the contract, Baltika starts to enter the

Russian market as planned in its strategy for 2002-2005,

using the retail system of its long-term wholesale

partner on the Russian market. The contract signed gives

Baltika the opportunity to acquire a holding in a retail

company operating in the Siberian-Ural area, belonging to

the same owners, during 2005-2006.



The share capital of the joint company is RUB 2.21m, of

which Baltika holds 50.1% or RUB 1.11m. The transaction

price was EUR 922,955 (EEK 14.4m). The holding will be

acquired from the current wholesale partner and payment

will be made by cancelling the partner’s indebtedness for

goods in the same value.



OOO "Kompania "BALTMAN RUS" has no loan obligations; the

company has no current court or arbitral proceedings.

The company was specially founded at the beginning of

2004 in order to form a joint company with AS Baltika.

The transaction of acquiring the holding is not a

transaction with a connected person within the meaning of

"Requirements for Issuers". AS Baltika has no current

agreements with the company BALTMAN RUS except for the

contract of acquiring the holding. According to the

agreement of the shareholders, Meelis Milder and Boriss

Loifenfeld as representatives of AS Baltika, and the

Russian citizen Viktor Rudnov representing the other

party belong to the council of directors of the company.





Meelis Milder

CEO

+372 6302 731