"Latvijas balzams" has not released any separate notification about its

plans  to  build  a distillery in Latvia. The information in mass media

appeared after the interviews in the newspaper "Diena" and in BNS.



On  July  1,  2002,  the Company provided the following comments to new

agency LETA (upon its request):



Next  year  "Latvijas  balzams" is expecting to complete the investment

project initiated already during the previous year. As a result, at the

end  of  2003  one  more  distillery  may be launched into operation in

Latvia. All in all, the company is planning to invest LVL 5.137 million

in  development  this  year, including investment in the designs of the

distillery.  Total  investment  amount required for the distillery, its

output   capacity  and  construction  costs  will  be  specified  after

completion  of the design. Neither is the geographical location nor any

time schedule known as yet. However, it is presumed that the distillery

may be launched into operation already next year.



The  purpose  of  the  distillery is to provide "Latvijas balzams" with

high  quality  spirits in sufficient amounts, needed to produce for the

domestic and Baltic markets. Currently the Latvian spirits market is in

crisis, while the Company operations require deliveries of high quality

spirits  on a regular basis. Presently, spirit is purchased in Estonia,

too.  At  the same time, spirit used for manufacturing of export brands

"Moskovskaja"  and  "Stolichnaja"  comes from and will continue to come

exclusively from Russia, according to the technology of these brands.