[Q&A from Teleconference Meeting] 1Q of Year ending December 31, 2017
<Date and Time> May 11, 17:00-18:00<Speakers> Director Shinichi Soya with the General Manager of the IR Section
1. Japanese Alcoholic Beverages BusinessQ. Competitors have already revised their own guidelines in response to the new fairtrading standards for alcoholic beverages, which are to be enforced from June. Could
you please explain the current situation at Sapporo? If sales promotion expenses are tobe reduced, will you be reinvesting in brands, etc.?
A. We are not in a position to comment on other companies. At Sapporo, we have been
carrying out a full-scale revision of our own guidelines since March. To ensure wehandle the new system correctly, which starts in June, we expect there to be adecrease in future sales promotion expenses, but we have not incorporated this into
the plan. Regarding brand investments, we have already set out policies and adirection for our expenditure aimed at increasing exposure and strengthening ourbrands; we do not plan to reinvest any decrease in spending on sales promotionexpenses.

Q. According to the breakdown for capital investments in the first quarter, work was
carried out to introduce one-way bottle production at the Nasu Brewery. How do you
plan to utilize small-lot brewery in the future?
A. As part of the trend in recent years towards centralization of production bases, wehave centralized manufacturing lines for our containers. At Nasu Brewery, which is asmall-lot brewery, we have made capital investments so that we can manufacture
products with containers not manufactured at regular-sized breweries. Rather thanjust manufacturing craft beers, we aim to increase fans of our products by making
flexible proposals for differentiated products.

2. Food & Soft Drink BusinessQ. According to the results for the first quarter, there was an increase in sales in thedomestic Food & Soft Drink Business, and an improvement in the product mix. Could
you please give us more details?
A. In the first quarter, there were strong sales of lemon-based beverages, which were116% against the same period in the previous fiscal year, and tea beverages using
Japanese ingredients, which were 119% against the same period in the previous fiscal

year. Regarding lemon-based products and soups, for which we carried out a pricerevision last year, there was no impact from the increase in prices and sales volumes
grew, contributing to our improved earnings.
3. Restaurants BusinessQ. In the Restaurants Business, there is a plan to increase earnings by 300 million yen
per year, but in the first quarter earnings fell by 100 million yen against the same period
in the previous fiscal year. Have labor costs risen more sharply than expected?
A. Rising labor costs were incorporated into the annual plan, but the cost increases wereeven tougher than we expected. However, the increased costs can be covered by cost
reductions in areas such as heating, lighting and water expenses, and we are notconcerned about controlling our fixed costs. We are planning to contribute to earnings
from second quarter onwards from our GINZA PLACE and Shimbashi outlets, which
opened last year, and the Ginza 7-Chome outlet, which completed its refurbishment onFebruary 28.

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