[Q&A from Teleconference Meeting] 1Q of Year ending December 31, 2016
<Date and Time> May 11, 11:00-12:00<Speakers> Director Shinichi Soya with the General Manager of the IR Section

1. Progress of Fiscal 2016 Projection
Q. Operating income has recorded a significant improvement of 2,900 million yen in the firstquarter. What is the progress of the annual projection by segment?
A. In the Japanese Alcoholic Beverages Business, the increase in earnings resulting from increased
sales volume of beers and other beverages is expected to be 3,300 million yen in the current fiscal
year, but earnings only increased 400 million yen as of the end of the first quarter. This is progressas projected because the first quarter is a period of small sales volume. Also, promotion expenses
have been paid as projected, and we will control promotional expenses depending on sales.
In the International Business, earnings already increased 800 million yen as of the end of the firstquarter compared with the projection of a 700 million yen increase in the current fiscal year.
However, the SLEEMAN’s payment method for promotional expenses was changed causing aperiod difference with the previous year. Promotional expenses in North America and other areas
are projected to be increased by 400 million yen annually, which will be expected to progress asprojected.
In the Food & Soft Drinks Business, the sales volume as of the end of the first quarter remained
almost on par with the same period of the previous year, but this is progress as projected. We plan
to launch new products with a Kireto Lemon brand during April and June and new soup products inthe autumn and winter. Thus, sales volume will increase in and after the second quarter and weconsider that an increase in earnings will be achieved as projected.
In the Restaurants Business, earnings only increased 100 million yen as of the end of the firstquarter compared with the projection of a 700 million yen increase in the current fiscal year, but weconsider that the projection will be achieved because large flagship stores will be opened in Ginzaand Shimbashi.
In the Real Estate Business, earnings increased 900 million yen as of the end of the first quartercompared with the projection of a 1,700 million yen increase in the current fiscal year. We are
actively promoting increasing the rent of existing tenants for the properties that we hold primarily
in the metropolitan area, including the Yebisu Garden Place. The occupancy rate of the Yebisu
Garden Place at the end of the first quarter rose from 87% of the same period of the previous year
to 99%, with the range of the occupancy rate increase being the largest in the first quarter.

2. International BusinessQ. Projects in Vietnam remained at the same level as those of the previous year. What is the recent
business environment?
A. In Vietnam, particularly the growth in the premium market that we have entered into, is curbed
due to increased liquor taxes and other factors. Competition in the market is also becoming
intensified. We made our presence in Vietnam as a bridgehead whereby the Sapporo brand canpenetrate Southeast Asia as a premium brand. Currently we are still more in the phase of gaining
recognition rather than securing profit. Environmental changes are within the scope of assumption inview of a business, but the challenge is responding to risk quickly and drawing up detailed measures
to be taken.

Q. It would appear that a 300 million yen cost was reduced reflecting a slash in cost in the Soft
Drinks Business in North America. What is assumed as a synergy effect of the two beverages
companies, Silver Springs Citrus, Inc. (SSC) and Country Pure Foods, Inc. (CPF)? Could you tell us
about whether the synergy effect is included in the projection for the current fiscal year?
A. SSC produces products under OEM agreements with other companies, but CPF has its own brandso it is strong in business-use products. We consider that routes for business-use products can beincreased, including the line of products. In addition, regarding the manufacturing site, SSC has only
one plant in Florida, but CPF has four plants in Ohio, Florida, Connecticut, and Texas. Thus, weexpect the geographical spread of the Soft Drink Business in the North America. Synergy effects areexpected for procurement of the raw materials, including fruit juice and packing materials, where anegotiation capability is needed.
We launched a synergy committee in the second half of the previous year. Synergy effects will
actually emerge in and after the current fiscal year. No quantitative effects have been included in theprojection for the current fiscal year.

3. Food & Soft Drink Business
Q. It would appear that a 300 million yen cost was reduced reflecting a cost curtailment in vendingmachines. What is the future strategy for vending machines, including cost curtailment?
A. The cost of 600 million yen for vending machines is expected to be reduced annually in theprojection for the current fiscal year, but we consider that the result of the first quarter has exceeded
the assumption. As for strategy, we would like to strengthen sales promotion for corporations, etc.
and utilize good locations where sales per machine are significant.
End