PRESS RELEASE: Ferrero doubts that announced by "Landrin" investments in Ukraine have future

Kyiv, March 02, 2011 – Some of the Ukrainian media last week had published information regarding future investment plans of St.Pete-based confectionary manufacturer CJSC "Landrin" who was quoted to invest 9-10 mln Euro to establish its own production facility in Ukraine. The articles also quote unknown experts who estimate that commencing manufacturing in Ukraine will let CJSC "Landrin" "to reduce price and to tighten competition with old rival Italian concern Ferrero".

In the light of those publications Ferrero is concerned that CJSC "Landrin" may want to export to Ukraine practices that he has been prohibited to carry out in Russia and is ready to fight for its rights. Indeed, Russian courts prohibited CJSC "Landrin" from manufacturing and selling confectionery products which violate Ferrero’s IP rights.

CJSC "Landrin" is known to copy ideas from Ferrero. "At the moment the score is 4 to 0 for Ferrero" - says Arturo Cardelus, Ferrero CIS Area Director. "In Russia, CJSC "Landrin" has forever tried to launch products similar to ours and not one of its four products has been successful. CJSC "Landrin"’s historical best result was a 39% share in chocolate eggs vs. 65% of Kinder Surprise. Since then, their position declined year by year and January this year was around 0,4%", - added Mr. Cardelus.

CJSC "Landrin"’s situation in Ukraine is even worse: Wafferato, the product which was supposed to compete with Raffaello, has disappeared from the market long before the courts examined the case. Chocolate eggs, which CJSC “Landrin” declares to produce in great varieties, reached, in December 2010, just a 1,7% market share (Nielsen data for December – the pick season for sales of confectionery).

One of the articles quotes CEO of BrandAid agency who estimates Ferrero’s "Kinder Surprise", the market leader with a share of 83%, as a “niche product”. Ferrero considers such estimations as plainly ridiculous.

As of alleged reduction of price as possible benefit from opening local production, Ferrero is concerned that the offer of cheaper products is not enough to contrast Ferrero in the Ukrainian market with strong local and international competitors and where consumers have learned to appreciate quality and innovation.

In the light of the aforesaid CJSC "Landrin"’s plans to invest 9-10 mln Euro to establish its own production facility in Ukraine appear to Ferrero to present a very high level of risk.

For further information, please contact: Elena Limakova LLC "Ferrero Ukraine" Tel. +38 (044) 247-19-35; mail: [email protected]