Central European Distribution Corporation Announces it has Signed a Binding Agreement for the Sale of 100% of its Polish Distribution Business to Eurocash SA for 400 million PLN

BALA CYNWYD, Pa., April 8 /PRNewswire-FirstCall/ -- Central European Distribution Corporation (Nasdaq: CEDC) today announced that it has signed a binding agreement for the sale of 100% of its distribution business in Poland to Eurocash SA for a purchase price of 400 million PLN in cash, on a debt free, cash free basis, subject to potential price adjustments (if any) and Polish anti-trust approval.  In addition, the Company has signed a six year agreement with Eurocash for the distribution of CEDC's portfolio of own brands and exclusive import brands in Poland.  The distribution agreement contains key provisions such as minimum inventory levels, commercial terms including pricing and discounts, and other promotional programs.  Closing of the transaction is expected during the beginning of the third quarter 2010.

William Carey, President and CEO commented, "As part of our continuing strategy to concentrate our efforts on our portfolio of own brands and imported brands, we have taken the decision to divest our wholesale distribution business in Poland, through this sale to Eurocash, which we believe will be an excellent home to our strong team of employees working in distribution.   We believe Eurocash is getting an excellent asset that has been the leader in the wholesale distribution of spirits in Poland over the last ten years and still today is approximately twice as large as the next closest wholesale spirit operation.  The wholesale business is extremely well established in the off trade (traditional trade), HORECA and petrol stations and together with Eurocash's strong market position in other consumer products, we believe Eurocash will be an excellent partner to drive the wholesale business forward."

William Carey, President and CEO continued, "The portfolio of our own brands and imported brands that will be distributed by Eurocash represents approximately 20%-30% of our ongoing sales in Poland, and we believe the distribution agreement we signed with Eurocash ensures stability of ongoing sales, promotions, inventory levels, cash flow and other key commercial elements.  We will continue to develop our trade marketing sales team (which is remaining with CEDC) that will continue to service our main off and on trade customers, as well as our key account sales team, which makes up the largest percentage of our customer sales mix."

William Carey, President and CEO continued, "We have been extremely impressed by the development of Eurocash over the last ten years, led by its founder and majority share holder, Luis Amaral, and look forward to working with Luis and his management team to ensure the growth of our strong product portfolio."

Luis Amaral, President of Eurocash commented "We are very enthusiastic with this acquisition, with CEDC distribution business we are not only acquiring the biggest spirit distributor but we are continuing our policy of only acquiring the best players in each segment. We believe that this acquisition together with the distribution agreement signed today will allow us to make Polish independent retailers more competitive."

The subject of the transaction includes the sale of these fourteen companies; Astor, Dako-Galant, Damianex, Delikates, Miro, MTC, Multi-Ex, Onufry, Panta-Hurt, PHA, Premium Distributors, Agis, PHS, and Saol.

CEDC is the largest producer of vodka in the world and Central and Eastern Europe's largest integrated spirit beverage business.  CEDC produces the Green Mark, Absolwent, Zubrowka, Bols, Parliament, Zhuravli, Royal and Soplica brands, among others. CEDC currently exports its products to many markets around the world, including the United States, England, France and Japan.

CEDC also is a leading importer of alcoholic beverages in Poland, Russia and Hungary. In Poland, CEDC imports many of the world's leading brands, including brands such as Carlo Rossi Wines, Concha y Toro wines, Metaxa Liqueur, Remy Martin Cognac, Guinness, Sutter Home wines, Grant's Whisky, Jagermeister, E&J Gallo, Jim Beam Bourbon, Sierra Tequila, Teacher's Whisky, Campari, Cinzano, Skyy Vodka and Old Smuggler. CEDC is also a leading importer of premium spirits and wines in Russia with such brands as Hennessey, Moet & Chandon and Concha y Toro, among others.

This press release contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including, without limitation, statements regarding our strategies, focus, beliefs and expectations. Forward looking statements are based on our knowledge of facts as of the date hereof and involve known and unknown risks and uncertainties that may cause the actual results, performance or achievements of CEDC to be materially different from any future results, performance or achievements expressed or implied by our forward looking statements.

Investors are cautioned that forward looking statements are not guarantees of future performance and that undue reliance should not be placed on such statements. CEDC undertakes no obligation to publicly update or revise any forward looking statements or to make any other forward looking statements, whether as a result of new information, future events or otherwise, unless required to do so by securities laws. Investors are referred to the full discussion of risks and uncertainties included in CEDC's Form 10-K for the fiscal year ended December 31, 2009, including statements made under the captions "Item 1A. Risks Relating to Our Business" and in other documents filed by CEDC with the Securities and Exchange Commission.

SOURCE Central European Distribution Corporation