Publication of the “2023 Annual Report on the Implementation of the Asahi Group’s BMS Marketing Policy”
The Asahi Group strives to achieve its aspiration of contributing to the healthy growth of infants and young
children based on the understanding of the importance of the International Code of Marketing of Breast-milk
Substitutes from the World Health Organization (hereinafter, “WHO”) (hereinafter, the “WHO Code”) and the
Resolutions on Infant and Young Child Feeding adopted at the World Health Assembly (hereinafter, “WHA”).
We recognize that our activities on this issue is one way of putting the Asahi Group Philosophy (AGP) into practicethrough our business.
This report summarizes the implementation status of “Our Approach towards ‘Infant Formula’ Distribution”(presently, “The Asahi Group’s Policy and Procedures for the Marketing of Breast-Milk Substitutes”) (hereinafter,
the “BMS Marketing Policy” <link to the BMS Marketing Policy>), which stipulates the Asahi Group’s
marketing policy on Breast-Milk Substitutes (BMS). The report includes cases of noncompliance related to theCompany’s BMS Marketing Policy that have been identified through internal and external processes, including
voluntary inspections, internal audits, and external verification by third-party auditors, as well as measures tocorrect such noncompliance. The report is submitted to the Board of Directors (*), which is attended by the Asahi
Group CEO and directors.
We believe that publication of this report, along with the revised BMS Marketing Policy, will increase thetransparency of our activities and further demonstrate the Company’s responsibility concerning BMS Marketing.
* About the governance structure of the Asahi Group Holdings

August 2024
Drahomira Mandikova
Group Chief Sustainability Officer (Group CSO), Asahi Group Holdings1About This Report
Starting this year, the Asahi Group will publish an annual report on the status of compliance with the BMS
Marketing Policy that the Company has established.
Based on the assessments of our BMS-related business activities by independent external auditors, in addition to
our own monitoring and internal audits, we strive to continuously improve our efforts in the area of BMS
marketing, and to report our progress in a transparent manner.
We will continue to monitor and review our own initiatives, and report on them.
For the first time, our 2023 activities were verified by an external third-party organization with appropriate auditor
qualifications. The scope of the verification includes the activities of our headquarters and the higher-risk countries(*2) in which the Company sells our products.
From the verification by an audit organization independent of the Company, in addition to the audits that the Asahi
Group's audit section has been conducting, we were able to gain valuable insights into whether or not our daily
activities are functioning and what needs to be improved.
* Definition of a higher-risk country:■ The mortality rate of children less than 5 years of age is 10 or more per 1,000 children, or■ The acute malnutrition (moderate and severe debilitation) of children less than 5 years of age is 2% or more.
Major Initiatives and Results in 2023
1. Revision of the BMS Marketing Policy
In order to encourage breastfeeding, the Asahi Group declared in its “Our Approach towards Infant Formula
Distribution” in 2017 that the Group will not advertise BMS products for infants under 12 months of age, even if it
is allowed by local laws, in the higher-risk countries mentioned above, where the health of infants and young
children is considered at risk. The Group was the first company with main business base in Japan to make such a
declaration.
This year, reflecting the results of the 2023 review, the Asahi Group revised “Our Approach towards Infant Formula
Distribution” to establish our responsible BMS marketing policy and procedures, and changed the name of thepolicy to “The Asahi Group’s Policy and Procedures for the Marketing of Breast-Milk Substitutes”. By doing so,
we believe that we were able to indicate our approach to BMS marketing more concretely than before.
2. Positioning of the BMS Marketing Policy in Our BusinessIn the Asahi Group, all our employees, from researchers involved in the BMS business to employees engaged inmarketing, sales, and distribution, as well as senior management, are responsible for upholding the standards for
conducting responsible BMS marketing.
The Asahi Group recognizes that it is responsible for adhering to its BMS Marketing Policy and implementing the2

Policy on a daily basis through its operations.
Also, the Asahi Group raises awareness within the Group about the importance of responsible BMS marketing, andcontributes to the implementation of consistent, clear and transparent actions in accordance with the Asahi Group
Code of Conduct.
We will continue to improve our practice through the process of internal monitoring, regular audits, and externalverification, focusing on the importance of compliance with our BMS Marketing Policy.
3. Information sharing within the Group(1) Information sharing and discussion with the Asahi Group management
The Asahi Group's BMS Marketing Policy applies to all BMS-related operations and is overseen by the Group
CSO, who is a top management executive handling our group’s sustainability activities. The content of thisreport is shared with the Asahi Group management at the Board of Directors’ meetings.
(2) Requests to our employees
Employees associated with the Asahi Group's BMS business are made sure to comply with the Group's BMS
Marketing Policy before they are assigned to BMS-related work. Relevant employees are trained on theimportance of following the Company’s BMS Marketing Policy.
As a result, our employees are committed to put the Company's BMS Marketing Policy into practice, and to
implement our policies as a basic approach in our business through training to raise their awareness.
4. Our approach to cooperation with industry and government agencies
Asahi Group Foods, a company of the Asahi Group that conducts BMS business, is currently affiliated with thefollowing organizations related to BMS. These organizations respect the WHO Code in the same manner as we do,
and give consideration to marketing activities in line with domestic laws that support breastfeeding, while giving
due consideration to the Antimonopoly Act.
Furthermore, as the Asahi Group already responded to the international “BMS Call to Action,” the Group iscommitted to support the national legislation of the WHO Code, in accordance with requests for cooperation fromgovernments.
The Asahi Group recognizes that the purpose of all lobbying on BMS is to support the public interest as well as toachieve the objectives of the Company.
(1) BMS-related business industry associations in which the Asahi Group participates
Currently, the Asahi Group participates in associations in Japan only.
・ Japan Dairy Industry Association < https://www.nyukyou.jp/ >3

・ Japan Baby Food Council < https://www.baby-food.jp/ >(2) Relationship with NGOs and other organizations
Although it is not classified as an BMS-related industry association, we have responded to the international“BMS Call to Action,” received from the Meridian Institute in 2020. In the response, we stated the following:・ Support for the national legislation of the WHO Code by governments
・ Cooperation with the Access to Nutrition Initiative (ATNI) in its monitoring of our compliance with the BMS
CodeReference: Link to our response to the “BMS Call to Action”
5. Activities to improve the compliance with our BMS Marketing Policy
We have conducted voluntary inspections (monitoring) of our business activities that have taken place in 2023 for
all countries in which we operate. Moreover, we verified the implementation of our BMS Marketing Policy by an
external auditor per country, including two higher-risk countries. We also continue to carry out internal audits,which we have been conducting from before.
(1) Voluntary inspection (monitoring)
We conducted voluntary inspections for all countries where the Asahi Group conducts BMS business and all
our sections engaged in the BMS business. The voluntary inspections checks the consistency and complianceof each section's operations with the Company’s BMS Marketing Policy.
(2) Internal audits
Internal audits were conducted by the Asahi Group's auditing section, which is independent of the BMS
business. In addition to the voluntary inspections described above, the internal audit provided suggestions topromote practice with respect for the WHO Code.
(3) External Verification
A third-party auditing organization NKKKQA, which is independent of the Asahi Group, verified theconsistency of the BMS marketing activities of the Asahi Group Foods' headquarters and those of the Company
conducted outside Japan, including in two higher-risk countries, with the Company's BMS Marketing Policy
and local laws and regulations related to BMS. NKKKQA also verified the system for ensuring suchconsistency. The findings of this verification are available on the Asahi Group Holdings’ website.
Reference: Report on the findings of external verification of the Company’s BMS business(Scope: The Company’s BMS business in Cambodia and Taiwan, and the Asahi Group Foods Headquarters’
BMS related operations)
Scope: The Asahi Group Foods Headquarters’ BMS-related operations, and the Company’s BMS business inCambodia and Taiwan< Link to the external report >4(4) Other Activities
The Company accepts whistleblowing and claims from external entities via multiple ways, and responds to allcases after confirming relevant facts. Claims are evaluated according to a predetermined process. When theclaims are substantiated by facts or there is a suspicion of noncompliance, they are subject to corrective
measures as in the case of voluntary inspections, internal audits, external verifications described above.
For claims concerning the Asahi Group, methods of claim submission other than the Company’s normal
reporting line will be integrated into the Group’s “Speak Up” system from May 2024. Claims of
noncompliance with the BMS Policy from inside or outside the Group will be evaluated and investigated withdue consideration given to the protection of the person who submitted the claim.
Reference: About the Asahi Group’s “Speak Up” system
A website explaining about the “Speak Up” system
In order to increase the transparency of the Company’s BMS marketing activities, we will publicly disclosethe [Attachment] describing the cases of suspected noncompliance with our BMS Marketing Policy that havebeen identified through our monitoring, internal audit, external verification, and other activities.
Through continuing to report on our progress, we plan to improve our BMS business initiatives and the policy
upon which the initiatives are based.
6. Review by the person responsible for the BMS Marketing Policy
Since the publication of the “Our Approach towards ‘Infant Formula’ Distribution” in 2017, which provides the
Asahi Group's responsible BMS marketing policy, the Group has positioned the policy as the foundation of themarketing activities conducted by our employees involved in the BMS business, and has promoted theimplementation of the policy in the work of each section and employee.
In light of the results of the review of our 2023 activities, which are presented in the attachment of this report, wehave made significant revisions to the original BMS Marketing Policy, aiming to improve its implementation andtransparency.
The revised policy describes the procedures for implementing the policy in our actual operations. We believe that it
will help demonstrate to our external stakeholders our responsibility to put the BMS Marketing Policy into practice.
Also, the first external verification provided us with suggestions on issues other than noncompliance, that are
related to our BMS business. We understand that there are issues and challenges that need to be addressed not only
by employees involved in the Group's BMS business, but also in cooperation with external stakeholders who
cooperate with us in sales. Taking the opportunity of the BMS Marketing Policy revision, we will continue tocontribute to healthy growth of infants and young children through our business.

5[Attachment]
About this attachment
Period covered: Activities conducted during the period from January 1 to December 31, 2023
Matters Described:
The following matters related to the Asahi Group's BMS business activities:
1. Noncompliance with the Company's BMS Marketing Policy or relevant national regulations identified through voluntary inspections (monitoring),
internal audit by the Group's audit section, and external verification by NKKKQA (an audit organization independent of the Company); and claims
received from internal and external entities through the “Speak Up” (Clean Line reporting system) or other channels regarding noncompliance with theCompany's BMS Marketing Policy that are found to be true as a result of the investigation.
2. Matters that are not BMS Marketing Policy noncompliance but require improvement, identified during the above activities.
Criteria referred to:・ “Our Approach towards ‘Infant Formula’ Distribution” (Asahi Group’s BMS Marketing Policy)
This policy was revised in August 2024 and renamed “The Asahi Group’s Policy and Procedures for the Marketing of BMS”.
・ Laws and regulations of countries where Asahi Group conducts BMS business, that are related to the WHO Code and WHA’s Resolutions and are
relevant to our BMS marketing and products.
Overview:
・ Regarding the noncompliance pointed out in the above audits and other means and claims submitted, there were 15 cases that were found to be true orsuspected to be true as a result of investigations. (There were 16 cases, but two of them were of the same issue pointed out by both internal audits andexternal verification, so the total was 15 cases.)・ For the 11 cases of noncompliance with the Company's BMS Marketing Policy, we have prepared plans to promptly correct the issue, and reported the6plans to the audit entity.
・ The remaining four cases do not concern noncompliance with the Company's BMS Marketing Policy, but we have established a direction forimprovement.
・ Many of the 11 cases of noncompliance with the BMS Marketing Policy were caused by the fact that the Company's original BMS Marketing Policy
did not clearly provide the governance and procedures for compliance. Based on this finding, we have decided to conduct a major revision of our BMS
Marketing Policy.
・ Of the 11 cases of noncompliance with the BMS Marketing Policy, nine cases (82%) concerned activities in Japan, including those of the headquarters,
and two cases (18%) concerned activities overseas. Regarding the overseas activities, there was one instance of noncompliance in Mongol and one in
Hong Kong.

71. List of matters related to the Asahi Group's BMS business that are found to be in noncompliance with BMS Marketing Policy
Method of identification of noncompliance and other issues* M: Monitoring (voluntary inspection), IA: Internal Audit, Ex: External Verification by a third-party organization, SP: “Speak Up” (via the Clean Linesystem), Ot: Others (claims made via Customer Relations Office and sales, and claims from NGOs, etc.)
No.

Mega process

Major process

Details of the claim

1

Governance

Policy management

2

Governance

Policy management

3

Governance

System for policy
implementation

4

Governance

System for policy
implementation

Decision-making authority is not clear
regarding the Asahi Group’s BMS
Marketing Policy development andrevision.
The title of the BMS Marketing Policy
could be taken as “the sale of infant
formula” and the content of the policy is
not consistent with the title. There is arisk of objective misunderstanding or
misinterpretation of the Company's ideas.
Although the policy mentions about thesystem for implementation of the BMS
Marketing Policy, some of theimplementation process and governance
do not match the actual situation or are
not functioning properly.
In the BMS Marketing Policy, the Action
Guidelines for Japan stipulates that
“There will be no excessive marketingthrough hospitals and maternity
hospitals” but does not provide specificprocedures, etc.

Relevant
BMS
WHO
Code
-

Country
covered

Identific
ation
method*Corrective actions

Time of corrective action
completion

Japan(Headquarter
s)

M
Ex

Clarify the position based on the Asahi Group's
authority criteria before the next BMS Marketing
Policy revision, and revise the policy accordingly.

August 2024 (upon revision of
the BMS Marketing Policy)

-

Japan
(Headquarters)

IA

Revise the BMS Marketing Policy so that the title
is consistent with the content and does not induce
misunderstanding.

August 2024 (upon revision of
the BMS Marketing Policy)

-

Japan
(Headquarters)

IA

Revise the BMS Marketing Policy and make thedescription consistent with the latest organizationand governance structure.

August 2024 (upon revision of
the BMS Marketing Policy)

-

Japan
(Headquarters)IA・ Establish a system to report to the newly
established BMS Conference with an annual
report compiling the issues identified throughmonitoring, audit, and claims from inside andoutside of the Company, and corrective actions.
・ The new BMS Marketing Policy will also
define the procedures for policy compliance.

August 2024 (upon revision of
the BMS Marketing Policy)

8

No.

Mega process

Major process

Details of the claim

Relevant
BMS
WHO
Code
-

Country

Identific
ation
method*Corrective actions

Time of corrective action
completion5

Governance

System for policy
implementation

The draft requests for decision for sales
measures do not provide sufficient
information for checking whether or not
specific actions are in conflict with the
WHO Code.

Japan(Headquarters)IA

By the end of 2024

There is no report on the evaluation ofoverseas sales regarding the compliancewith the BMS Marketing Policy.
There is no clear system for education oncompliance with the BMS Marketing
Policy in Japan.
Means to ensure that distributors inhigher-risk countries understand the
BMS Marketing Policy are notsufficiently established.

-

Ex

-

Japan
(Headquarter
s)
Japan

In the requests for decision for the products
covered by the Policy, etc., (i) drafter is to avoid
using misleading wordings in preparing therequest, (ii) approver is to check the draft against
the BMS Marketing Policy and provide
guidance, and (iii) when necessary, the rationale
for not violating the BMS Marketing Policy is tobe described.
Establish a formal reporting format and preparea report accordingly.

6

Governance

System for policy
implementation

7

Compliance

Education

M

Revise the BMS Marketing Policy and establish
procedures for education.

August 2024 (upon revision of
the BMS Marketing Policy)

8ComplianceContract-

Hong KongM

By the end of 2024

Since specific vouchers used forverification during the voluntary audit
are not indicated, the voluntary audit is
not effective enough.
The BMS Marketing Policy does notreflect the changes in the section
conducting audits caused by the changes
in group governance in 2022.
There is a suspicion of violations of our
BMS Marketing Policy over the image ofa baby bottle on the packaging of
powdered beverage for hydration of
infants and young children in Mongol. (Itis described “suspicion” because it was
unclear at the time of the internal audit
whether or not the powdered beverages
for hydration of infants and young
children are considered BMS in the
Company.)-Japan(Headquarters)IA・ Explain the BMS Marketing Policy to local
distributors and make the policy widely
known.
・ Conduct regular voluntary inspections andaudits.
Revise the BMS Marketing Policy and conduct
voluntary audit accordingly.

9

Governance

Voluntary audit

10ComplianceInternal audit

-

Japan
(Headquarters)

M

Revise the BMS Marketing Policy and make thedescription consistent with the latest
organizational structure.

August 2024 (upon revision of
the BMS Marketing Policy)

11

Governance

Label

Article 9

MongolIA

Clarify the scope of policy application and thedefinition of BMS in the new BMS marketing
policy with reference to the WHO Code andother companies' policies.
* The scope of the new policy includes “delivery
products (i.e. teats and bottles), and informationon the use thereof;” therefore, the baby bottles
for the product in question are subject toimprovement.

Establish the policy andschedule by the end of 2024

August 2024 (upon revision of
the BMS Marketing Policy)

August 2025

2. List of matters related to the Asahi Group's BMS business that are not found to be in noncompliance with the BMS Marketing Policy but require
improvement
9All were pointed out at the time of external verification by a third-party organization.
No.
1

Mega process
Governance

Major process
System for policy
implementation

2

Compliance

Education

3

Compliance

Label

4

ComplianceLabel

Details of the claim
Where the responsibility for compliance with the BMS
Marketing Policy rests per country is not clearly statedin internal documents.
Implementation of the BMS Marketing Policy wasconfirmed through interviews and documents, but
records of participation have not been created.
There is only few labeling in local languages on BMS
products for children with milk allergies that are soldoverseas.
The actual label on a baby food product, which is notcovered by the BMS Marketing Policy, was different
from the instructions given by the headquarters.

Country
Cambodia, Taiwan

Direction of improvement
Designate a person responsible per country, and post and disseminate the information
within the company.

Japan (Headquarters)

Create records of participants after the time of education in 2024.

Cambodia

Each product, including its labeling, has gone through administrative confirmation andthere are no problems in light of relevant laws. However, we will consider improving themethod of providing information to consumers.
The product in question has already been discontinued and is no longer in local distribution
inventory.
We will improve the management system of local distributors with regard to the finalcontent of the labeling.

Taiwan10