With its favorable demographics, and tourism prospects, as well as shifting consumer trends, Turkey beer market possesses a significant growth potential, as evidenced by the increase of per capita consumption to 11 liters in 2006 from 4 liters in 1986. It can be concluded that despite the positive factors mentioned above, the increase in the total consumption in the last 10 years does not reflect the real potential of the market, due to the economic crises, earthquakes and high prices as a result of special consumption taxes, which is above the European Union standards, as well as other similar negative effects.

We expect the Turkey beer market to continue its dynamic growth in the following periods in the light of below average per capita beer consumption levels, European Union membership process and the positive factors mentioned above.

Our company is the largest brewer in Turkey with its domestic operations consisting of 5 breweries, 2 malteries and 1 hops processing facility. Each of our total annual beer production capacity of 9.1 million hectolitres and our total annual malt production capacity of 97.500 tonnes, represent 71% of the Turkish market.

Anadolu Efes performs its marketing and sales activities in Turkey through its wholly owned subsidiary Efes Pazarlama ve Dağıtım Ticaret A.Ş. (EFPA), which has ten sales regions. EFPA distributes its products countrywide by 263 distributors and exclusive dealers. Our sales system utilizes the most up to date information technologies through SAP system to work on timely and accurate information flow.

Tarbes Tarım Ürünleri ve Besicilik Sanayi ve Ticaret A.Ş. (Tarbes) is our hops production company in Turkey. With an annual capacity of 400 tonnes of pellets, Tarbes supplies us with hops, one of the major ingredients for beer production.

Our main strategy in the Turkish beer market is to maintain our market share while increasing the total beer consumption by satisfying consumer preferences and consequently improving the low annual per capita consumption in the market.

"Efes Pilsen", with a brand awareness of 100%1, is one of the most valuable brands of Turkey and the brand with the largest share of retail trade within the food and beverage category of the fast moving consumer goods segment2. The internationally famous "Efes" brand is enjoyed in over 50 countries including European Union countries and the United States.

As part of our efforts to continuously improve our brand portfolio in order to satisfy our consumers' preferences, we have launched "Efes Ice" and "Marmara Kırrmızı" in 2006. In early 2007, Turkey's first wheat beer "Gusta" as well as the lemon and agave flavoured "Mariachi" brand were launched and added to our brand portfolio. In addition to these new launches, our brand portfolio in Turkey consists of “Efes Pilsen”, “Efes Light”, “Efes Dark”, “Efes Xtra”, “Marmara Gold”and our licensed products “Miller Genuine Draft (MGD)”, “Beck’s” and “Foster’s”.

Despite certain contraction of the Turkish beer market due to severe winter and exceptionally short summer period coupled with the lower than expected overall tourism activity in 2006, the domestic sales volume of our Turkey beer operations was at 6.6 mhl in 2006, parallel to previous year, resulting in a market share increase to 82% from 80% in 2005.

The export sales volume of our Turkey beer operations was also in line with previous year at 0.5 mhl, bringing the total sales volume of our Turkey beer operations to 7.1 mhl.