DAIRY FARM TO CLOSE REMAINING TAIWAN DRUGSTORES

15th December 1997 -- Dairy Farm International Holdings Limited, the international retailing and wholesaling group, today announced that the Company will close its remaining drugstore outlets in Taiwan by the end of January 1998.

The Taiwan drugstore chain, which operates under the name Mannings, had 59 stores at the end of 1996. Twenty under-performing stores were closed earlier this year and, following a recent review by the new management team in Taiwan, the decision was made to close the remaining stores. "Trading conditions remain difficult and, in the current economic climate, we do not believe that the chain can achieve an acceptable level of profitability " said Dairy Farm's new Regional Director for North Asia, Robert Neslund.

Mr. Neslund said that in 1996 the Company's Taiwan drugstore business had incurred a loss of US$8 million on sales of some US$40 million and a similar loss is anticipated for 1997 on sharply declining sales. He said that Dairy Farm expects the closure costs to be charged in the 1997 Accounts would be US$14 million, some US$9 million of which relating to non-cash asset write-offs.

Mr. Neslund said that the Company's Wellcome supermarket chain of 97 stores in Taiwan would be unaffected by the drugstore closures. He also confirmed that the new joint venture hypermarket business with Casino of France, which is in its pre-opening phase, continues to make progress towards its first store opening at the end of 1998.

Mr. Neslund said that the business would cease operation by the end of January and that some 250 staff would be offered redundancy packages as appropriate. "We very much regret having to ask good staff to leave the Company, appreciate their efforts in a difficult market, and will ensure that the affected staff members will be treated fairly."

For other 1997 Business Developments, please see Notes to Editors .