February 10, 2005

The management of Kanematsu Corporation recently agreed to a proposal by the wine company Mercian Corporation to take an equity stake in Nippon Liquor Ltd., a subsidiary of Kanematsu Corporation that has for many years been operating as a distributor of imported wine and other alcoholic beverages. This move is welcomed by Kanematsu Corporation as an effective means of expanding and strengthening the business base of Nippon Liquor Ltd.

1. Objectives of Capital Participation
Since its establishment in 1963, Nippon Liquor has been engaged in the distribution of liquors imported from the world, principally wine. The company began selling wine in the days when the volume of consumption of this liquor in Japan was extremely small, and was one of the first companies to engage in the volume sale of wine at the wholesale level. The management of Nippon Liquor followed a strict policy of selecting only wines by prestigious producers from regions - particularly in Europe - that were famous for the quality of their wine. The scale of the company's operations eventually grew to the point where they now handle high-quality wines from over 35 companies in 11 countries. Nippon Liquor enjoys one of the highest reputations in Japan as a specialist distributor of imported fine wines.

Kanematsu is putting effort into further growing its wine business as a sub-category of its Foodstuffs Division, one of the Company's core business segments. In this capacity, Kanematsu has provided a range of support services to Nippon Liquor, including the various clerical operations involved in importing the wine. Against this backdrop, Kanematsu has decided that, in order to strengthen the Group's business base in the field of the importation and distribution of wine and further raise the value-added of this business, the optimal course of action would be to accept the proposal for capital participation in Nippon Liquor by Mercian Corporation, whose core business also involves wine.

Together with its equity stake, Mercian will also acquire a presence on the Board of Directors of Nippon Liquor. With this, while the corporate name of Nippon Liquor Ltd. would remain unchanged, it would, in effect, be "reborn" as a company enjoying the strong backup support of Mercian Corporation. This would make feasible plans to achieve the status of No. 1 company in the fine wines sector of the Japanese market, allow Nippon Liquor to transform itself into an even more specialized enterprise than at present, and contribute to the development and expansion of the market for wines in this country.

The capital participation by Mercian brings the respective equity stakes in Nippon Liquor to 44.4% for Kanematsu, 44.4% similarly for Mercian, and 11.2% for the French winery Maison Louis Jadot. With effect from April 1, 2005, current Nippon Liquor President Jun Yamaguchi will assume the post of Chairman and Representative Director of the company, while Fumitaka Ohtani, currently Director and Senior Executive Officer at Mercian Corporation will assume the post of president.

2. Details of Capital Participation:
Additional ordinary shares of common stock of Nippon Liquor Ltd. shall be issued for private placement with Mercian Corporation.

Company name: Nippon Liquor Ltd.
Address: 2-14-5 Mita, Minato-ku, Tokyo 108-0073
Established: 26 November 1963
Annual sales: \ 2,627 million (fiscal term ended March 2004)
Paid-in capital: \ 325 million (as of February 10, 2005)
Lines of business: Agency for the import of alcoholic beverages (principally wine), and the wholesaling of such liquors
Main brands sold: Louis Jadot; Champagne Taittinger; M.Chapoutier; Pio Cesare;