September 28, 2010

Kirin Holdings Company, Limited
Kirin Beverage Company, Limited
Koiwai Dairy Products Co., Ltd.

Recapitalization and Strengthening of the Operating Base of Koiwai Dairy Products Co., Ltd.

Tokyo, September 28 — Kirin Holdings Company, Limited (President and CEO, Senji Miyake; hereinafter "KH") announced today that KH, Kirin Beverage Company, Limited (President and CEO, Hitoshi Maeda; hereinafter "KBC") and Koiwai Dairy Products Co., Ltd. (President and CEO, Takayuki Fuse; hereinafter "KIW") agreed that KH will purchase all shares of KIW owned by KBC, and take over direct control of KIW by also acquiring KIW shares allocated to third parties. The agreement also details the recapitalization and split-off of KIW's refrigerated drinks manufacturing operations in Tokyo, and stipulates that KBC will acquire all of these shares. Through recapitalization and the strengthening their financial standing, KIW seeks to focus its efforts even further into the dairy product business and improve its operating base. Restructuring should be complete by January 2011.

KIW was established in 1976 when Koiwai Farm, Ltd. split-off its dairy product operations and formed a 50/50 joint venture with Kirin Brewery Company, Limited. In 2005, the company sought to improve its operating base by integrating its operations with those of KBC's refrigerated drinks. Later on, in 2007, refrigerated drink operations excluding Koiwai brand milk beverages were handed over to KBC in an effort to strengthen KIW's dairy product business.

However, because of adverse market conditions and the need to further develop the KIW brand while improving corporate value, it was decided that as of January 2011 KIW would no longer be given charge of the production, sales and distribution of KBC refrigerated drinks so that KIW could further specialize into the dairy product business. After performing restructurization through this transfer of ownership of KIW shares owned by KBC to KH and KH's acquisition of shares allocated to third parties, as well as the split-off and later acquisition of KIW refrigerated drinks manufacturing operations in Tokyo by KBC, the company seeks to further develop and strengthen its operating base by drastically reviewing cost structure and promoting leaner business practices.

KIW has aimed to become a dairy product manufacturer of premier quality since its very foundation and will now seek to strengthen its operating base by further enhancing the Koiwai brand value. The company aims to develop attractive products that further enhance its brand image by focusing management resources on its cultured milk products including Koiwai yogurt made from 100% fresh milk, a product that has seen constantly increasing popularity since its introduction 25 years ago, and also on its high quality dairy products such as Koiwai pure butter. Regarding sales, Koiwai plans to first focus distribution of its products around the Tokyo metropolitan area and Iwate prefecture where the Koiwai brand value is well recognized and aims to further develop its relationship with clients. The main production factory will be the Koiwai plant. KIW plans to improve productivity and perform restructuring to improve cost-performance while still maintaining quality as its first priority.
The Kirin Group will continue sales of Koiwai brand beverages through KBC. Moreover, cultured milk from KIW will still play an active role in Kirin Group's health product series KIRIN Plus-i. KIW is expected to generate additional profit and improve its business operations through Groupwide cooperation efforts to enhance brand value.

Outline of the recapitalization and split-off of KIW

Overview of Koiwai Dairy Products Co., Ltd.

Overview of Koiwai Dairy Products Co., Ltd. (after February, 2011)