Quilmes Industrial (Quinsa) S.A. (NYSE:LQU; "Quinsa" or the "Company") yesterday announced that for the three months ended September 30, 2000, net income increased 37 percent to US$ 21.4 million, or US$ 0.198 per share, compared to US$ 15.6 million, or US$ 0.146 per share for the third quarter in 1999.

Earnings per share for the quarter are calculated on the basis of 108,150,089 shares for 2000 and 106,568,750 shares for 1999, reflecting the recent increase in capital used to acquire 11.75 percent of Buenos Aires Embotelladora S.A.'s ("BAESA") capital.

For the nine months ended September 30, 2000, net income was US$ 47.4 million, or US$ 0.438 per share, compared to US$ 52.4 million, or US$ 0.492 per share in 1999. Earnings per share for the first nine months are calculated on the same basis as for the third quarter.

FINANCIAL REVIEW: THIRD QUARTER 2000

Total beverage volumes increased 37 percent to 3,667,000 hectoliters as a result of the acquisition of BAESA in December 1999. Beer volume sales totaled 2,124,000 hectoliters for the quarter, compared to 2,328,000 hectoliters during the third quarter 1999. Beer volumes declined principally as a result of a continuing weakness in the economy, very poor weather and an aggressive pricing environment in Argentina. Volume sales for soft drinks and water increased to 1,543,000 hectoliters due to the consolidation of BAESA. These figures include sales for the Paraguayan soft drinks business, which was sold in September 2000. Thus, the Company will not be reporting these volumes as of the fourth quarter 2000.

Net sales for beer declined to US$ 120.1 million from US$ 133.2 million a year earlier, due to the contraction in volumes sold and to a 1.1 percent decline in average pricing. Net sales for soft drinks and water were US$ 70.0 million compared US$ 15.2 million during the third quarter 1999. Consolidated net sales increased to US$ 195.0 million, from US$ 150.6 million a year earlier.

Gross profit increased to US$ 91.1 million in the third quarter of 2000, from US$ 85.8 million for the same period in 1999. Quinsa's selling and marketing expenses were US$ 56.0 million compared to US$ 43.2 million for the same periods, respectively, due to the incorporation of BAESA. Administrative and general expenses were US$ 19.7 million for the three months ended in September 2000, compared to US$ 18.4 million for the third quarter 1999. Significantly, administrative expenses declined to 10.1 percent of sales from 12.2 percent on sales last year, despite the incorporation of BAESA.

Operating profit was US$ 15.4 million compared to US$ 24.2 million a year earlier. This was caused principally by the decline in beer volume sales and, to a lesser extent, by changes in the sales mix which were not fully compensated by lower labor expenses and savings in the cost of raw materials such as bottles and cans.

Other income increased to US$ 29.0 million compared to US$ 9.5 million during the third quarter of 1999, due to the sale of the soft drinks business in Paraguay. Other expenses declined because the figure for last year included a US$ 2.5 million write-off related to the closure of the old Tucuman brewery in Argentina. Net interest expense increased from US$ 0.8 million in 1999 to US$ 7.7 million as a result of the financing obtained for the acquisitions of BAESA and of Cerveceria Boliviana Nacional ("CBN").

Consolidated net income increased 37 percent to US$ 21.4 million, or US$ 0.198 per share, compared to US$ 15.6 million, or US$ 0.146 per share for the third quarter in 1999.

Total shareholders' equity and minority interest increased to US$ 778.8 million as of September 30, 2000 from US$ 745.1 million as of September 30, 1999. Total bank debt, less cash, certificates of deposit and government securities, was US$ 338.5 million as of September 30, 2000, compared with US$ 15.7 million a year ago. Long term debt portion of total bank debt increased to US$ 81.4 million from US$ 15.1 million a year ago. The increase in net debt was the result of financing incurred to acquire BAESA and CBN, in addition to the consolidation of BAESA's own debt. This figure does not include a US$ 63.9 million cash payment received for the sale of Paraguay Refrescos S.A. ("Paresa") in October, 2000. Inventories decreased to US$ 125.2 million from US$ 134.8 million in 1999 despite the acquisition of BAESA, reflecting the Company's on-going efforts to control working capital. Trade receivables were US$ 100.3 million compared to US$ 63.5 million a year earlier, due to the consolidation of BAESA.

Capital expenditures, excluding acquisitions, reached US$ 16.1 million during the 2000 third quarter and US$ 29.7 million for the same period in 1999. For the third quarter of 2000, capital expenditures were principally related to investments in BAESA and final works related to the Ypane brewery expansion in Paraguay.

FINANCIAL REVIEW: FIRST NINE MONTHS 2000

For the nine months ended September 30, 2000, beer volumes reached 7,536,000 hectoliters, a 2.5 percent decline on the 7,732,000 hectoliters sold in 1999. Volume sales of soft drinks and water increased to 5,105,000 hectoliters from 1,481,000 for the same periods, as BAESA's volumes more than compensated for lower sales in Paraguay.

Net sales were US$ 675.3 million compared to US$ 527.8 million for the same period in 1999. The increase in sales was principally due to the acquisition of the soft drinks business in Argentina, which offset declines in average pricing and beer volume sales.

Gross profit for the first nine months of 2000 was US$ 334.3 million, compared to US$ 300.0 million reached in the same period of 1999, due to increased sales. Selling expenses increased to US$ 184.9 million from US$ 139.1 million a year earlier as a result of the acquisition of BAESA. Administrative and general expenses were US$ 60.6 million compared to US$ 57.3 million for the same periods. As a percentage of sales, however, they decreased from 10.9 percent to 9.0 percent.

Other income increased to US$ 32.2 million compared to US$ 11.3 million during the first nine months of 1999 due to the sale of Paresa. Higher debt levels resulting from the acquisitions of BAESA and CBN, led to an increase in net interest expense, from US$ 0.3 million to US$ 19.4 million.

Consolidated net income for the first nine months of 2000 was US$ 47.4 million, or US$ 0.438 per share, compared to US$ 52.4 million, or US$ 0.492 per share for the same period last year.

MARKETS

ARGENTINA:

Beer: The economy continued to show no signs of improvement during the third quarter, particularly in terms of consumer spending. The market was also affected by particularly poor weather, to the extent that this year has been the rainiest on record for the last 100 years.

Domestic volume sales of beer during the third quarter 2000 declined to 1,581,000 hectoliters, compared to 1,751,000 during the same quarter in 1999. The quarter also witnessed renewed pricing aggressiveness from an important competitor, despite which the Company's market share for the third quarter held at 68.4 according to Nielsen, compared to 69.1 percent for the second quarter 2000. This performance was remarkable in light of the fact that average pricing actually increased nearly 1 percent from the second to the third quarter this year.

Sales were US$ 90.4 million in the 2000 third quarter compared to US$ 103.3 million a year earlier. The decline was largely due to lower volume sales and, to a lesser extent, to average price declines particularly in cans.

Operating profit was US$ 17.7 million for the quarter, compared to US$ 22.0 million a year earlier. The decline in operating profit for the third quarter was principally due to lower net sales, which were partially compensated with a lower cost of labor and raw materials. In that regard, headcount was reduced by 8 percent compared to September 1999. Furthermore, the Company has retained Andersen Consulting to assist in the reduction of administrative and IT expenses, particularly in view of the pending merger with BAESA. EBITDA for the third quarter 2000 was US$ 29.9 million.

Soft Drinks: BAESA's volume sales for the third quarter 2000 were 1,088,000 hectoliters of soft drinks (1,033,000 in Argentina and 55,000 in Uruguay) and 166,000 hectoliters of water (131,000 in Argentina and 35,000 in Uruguay). Market share in the Greater Buenos Aires region stands at about 26 percent.

Net sales for the third quarter were US$ 57.4 million. The pricing environment continued to be very competitive, particularly due to the action of B-brands. The prolonged and deep recession has led consumers to trade down to lower-priced brands. This environment led the Company to launch a low-priced brand, Kas, in September. This brand will be competing with B-brands in the lower-income segment of the market.

Operating loss for the quarter was US$ 2.7 million, while EBITDA was US$ 2.0 million. Significant cost savings have been introduced, the full impact of which will be reflected next year. Thus, the cost of raw materials such as sugar, fructose and labels has been reduced, and headcount has also come down significantly. Significant advances have been made in terms of combining the distribution network with that of the beer business, with large parts of its direct sales operation having been integrated to Quilmes' distribution network, particularly in the north and west of Greater Buenos Aires and in La Plata. Furthermore, the Mar del Plata distribution centers have been merged. Savings and synergies already in place amount to US$ 13.5 million on an annualized basis, and a slightly higher figure than that has already been identified in terms of further savings that are expected to be in place next year.

An agreement in principle has been reached to acquire the second-largest PepsiCo franchise in the country, and the transaction is expected to be completed before the end of the year. This will allow for a further consolidation of the soft drinks industrial system, which should be completed by the year 2002.

The Board of Directors of both BAESA and Cerveceria y Malteria Quilmes have issued convening notices to Shareholder Meetings for each of the companies. The resolutions to be approved at those meetings include the merger of both companies. Once completed, this merger will allow for significant savings in terms of administrative and tax expenses.

Mineral Water (not consolidated): Eco de los Andes ("Eco")'s domestic volume sales increased 2.3 percent during the third quarter 2000, despite the difficult economic environment. Market share stands at about 13 percent, according to Nielsen. Negotiations are currently underway to transfer BAESA's water brand, Glaciar, to Eco de los Andes. This brand adds another 9 points of market share to the consolidated water business, making for a total share of 22 percent. Furthermore, Eco has very recently launched a new processed water brand, Nestle Pure Life. Fresh Water, a recently acquired company that sells water in 5 gallon jugs and targets the home and office segment, has been streamlined and is now fully integrated to the Eco business system.

BOLIVIA: The Company has recently completed the acquisition of a 60 percent stake in the largest Bolivian brewery, Cerveceria Boliviana Nacional. Consolidated market share now stands at about 80 percent. Thus Quinsa has achieved both the critical mass and a degree of market participation that will allow for substantial operating improvements going forward. The financials of this company have not yet been included in the Company's consolidated figures, since the last four months of operations this year will be consolidated with Quinsa's fourth quarter figures.

Domestic volume sales for the third quarter 2000 reached 102,000 hectoliters compared to 129,000 hectoliters for the same period in 1999. This decline reflects a continuing slowdown in demand for consumer goods in the country, which was affected by an increase earlier in the year of the specific tax levied on beer and by a contraction of consumer credit. Sales for the quarter were US$ 5.5 million, compared to US$ 7.5 million a year earlier, as a consequence of the lower volumes sold and a 6.1 percent decrease in average prices. The latter was in turn the result of both the intense competition from CBN prior to our acquisition and the depreciation of the local currency against the U.S. dollar. Operating loss for the quarter was US$ 1.9 million compared to a loss of US$ 0.2 million a year earlier. EBITDA was a negative US$ 0.2 million.

CHILE: Domestic beer volume sales increased 20 percent to 72,000 hectoliters, from 60,000 hectoliters last year. This performance resulted in an increase of market share to 9.1 percent from 8.2 percent for the second quarters of 2000 and 1999, respectively. The Heineken brand continues to do extremely well, and the Company has now launched a new long-neck returnable bottle targeted at the on-premise segment.

Sales reached US$ 5.2 million, compared to US$ 4.5 million a year ago. The increase in sales was a consequence of the increase in volumes, which more than made up for a decline in average pricing. Pricing was affected by the competitive environment and also by the depreciation of the local currency against the U.S. dollar. Operating results continued to improve, as the loss for the third quarter 2000 was US$ 1.0 million compared to a loss of US$ 1.3 million a year earlier. EBITDA was US$ 0.1 million, making it US$ 0.8 million for the first nine months of the year, compared to a negative US$ 1.2 million for the nine months to September 1999.

PARAGUAY: Domestic beer volumes were 310,000 hectoliters during the third quarter, compared to 313,000 hectoliters in the third quarter 1999. Market share was 81 percent, an increase of more than 2 percentage points on last year. Real price increases combined with a higher proportion of the Quilmes brand in the total sales mix led to an improvement of 6 percent in average prices compared to the third quarter 1999. Since cans and the Quilmes brand are now produced locally, production costs declined 7 percent for the quarter. Also contributing to this decline were reductions in the cost of labor. Beer sales reached US$ 17.8 million for the third quarter compared to US$ 16.9 million a year ago. Operating profit for the beer business increased 33 percent to US$ 5.7 million for the third quarter of 2000 from US$ 4.3 million a year earlier. EBITDA for the quarter was US$ 8.8 million.

Volume sales for soft drinks and water reached 282,000 hectoliters for the 2000 third quarter, compared to 331,000 hectoliters for the 1999 third quarter. Net sales for soft drinks and water were US$ 13.3 million compared to US$ 14.9 million a year ago, principally due to the drop in volumes sold which was partially offset by a 5 percent increase in average prices. Operating profit was US$ 0.3 million compared to US$ 1.1 million for the third quarters of 2000 and 1999, respectively. EBITDA for the third quarter and first nine months of 2000 were US$ 2.1 million and US$ 8.0 million, respectively. The Company completed the sale of this business to Coca-Cola Interamerican Corporation during September 2000. Consequently, as of the fourth quarter figures for the soft drinks business shall no longer be reported.

URUGUAY: Uruguayan beer market volumes declined 17 percent compared to the third quarter 1999, affected by a drop in consumer spending. Quinsa's domestic beer volume sales were 53,000 hectoliters, and market share was flat at 54 percent, compared to the third quarter 1999. Sales were US$ 6.7 million in the 2000 third quarter compared to US$ 9.0 million in the 1999 third quarter. The decline in sales was principally due to a combination of lower volume sales and the divestiture of the malting plant earlier this year. Operating results were a negative US$ 0.3 million compared to a US$ 0.8 million profit last year, due to the decline in sales that more than offset the elimination of losses from the malting business. EBITDA for the quarter was US$ 0.3 million.

RECENT DEVELOPMENTS

The Company announced in October 2000 that its Board of Directors had authorized the repurchase of up to 5,000,000 of its shares, or 4.6 percent of its capital stock. To date repurchases under this program have been immaterial. Authorization to buy shares under the program was extended for a period of up to 12 months.

FORWARD LOOKING STATEMENTS

This release contains forward-looking statements. Such statements are not statements of historical fact, and reflect the beliefs and expectations of the Company's management. The words "should", "expects", "believes" and similar words are intended to identify these statements, which necessarily involve known and unknown risks and uncertainties. These include the macroeconomic environment in the countries within which Quinsa operates, the impact of competitive products and pricing, regulatory approval and other risks described in the Company's registration statement and other Securities and Exchange Commission filings.

ABOUT QUINSA

Quinsa is a Luxembourg-based holding company, which controls 85 percent of Quilmes International (Bermuda) Ltd., ("QIB"). The remaining 15 percent share is owned, since 1984, by Heineken International Beheer B.V. ("Heineken"). Heineken Technical Services B.V. renders technical assistance to the operating companies. Quinsa, through QIB, controls beverage and malting businesses in five Latin American countries. Its beer brands are market leaders in Argentina, Bolivia, Paraguay and Uruguay and have a strong presence in Chile. The Company also owns a controlling interest in the largest PepsiCo bottler in Argentina. Quinsa's common and preferred shares are listed on the Luxembourg Stock Exchange (Reuters codes: QUIN.LU and QUINp.LU). Quinsa's American Depository Shares, representing the Company's preferred shares, are listed on the New York Stock Exchange (NYSE:LQU).

Quinsa's web address: www.Quinsa.com

                   Quilmes Industrial (Quinsa) S.A.
UNAUDITED CONSOLIDATED PROFIT AND LOSS STATEMENT
(U. S. Dollars in millions, except per share amounts)

Three months ended Nine months ended
September 30th, September 30th,
2000 1999 2000 1999
---- ---- ---- ----

Net sales 195.0 150.6 675.3 527.8
Cost of goods sold (103.9) (64.8) (341.0) (227.8)
------- ------ ------- -------
Gross profit 91.1 85.8 334.3 300.0

Selling and
marketing expenses (56.0) (43.2) (184.9) (139.1)
Administrative and
general expenses (19.7) (18.4) (60.6) (57.3)
------ ------ ------ ------
Operating profit
before interest,
other income,
expenses and taxes 15.4 24.2 88.8 103.6

Interest income 1.4 1.2 7.8 5.8
Gain on sales of
fixed assets 0.0 0.2 0.1 1.3
Other income 29.0 9.5 32.2 11.3
Interest expenses (9.1) (2.0) (27.2) (6.1)
Other expenses (4.4) (7.3) (17.8) (20.9)
----- ----- ------ ------
Earnings before taxes
and minority interest 32.3 25.8 83.9 95.0

Income taxes (8.0) (6.7) (30.2) (29.6)
Minority interest (2.9) (3.5) (6.3) (13.0)
----- ----- ----- ------
Net income 21.4 15.6 47.4 52.4

Net income per share: 0.198(a) 0.146(b) 0.438(a) 0.492(b)

Depreciation
& Amortization 25.7 20.0 75.2 61.8
EBITDA 41.1 44.2 164.0 165.4

(a) Number of shares used as a basis for EPS calculation: 108,150,089

(b) Number of shares used as a basis for EPS calculation: 106,568,750


Quilmes Industrial (Quinsa) S.A.
UNAUDITED GEOGRAPHIC INFORMATION - SUMMARY
(U. S. Dollars in millions)

Three months ended Nine months ended
September 30th, September 30th,
2000 1999 2000 1999
---- ---- ---- ----
NET SALES

Argentina 90.4 (a)103.3 322.1 (a)359.9
BAESA (b) 57.4 n.a. 189.5 n.a.
Bolivia 5.5 7.5 16.1 22.7
Chile 5.2 4.5 18.2 16.7
Paraguay 31.3 31.8 108.2 111.7
Uruguay 6.7 9.0 26.7 30.2
Interarea sales (1.5) (5.5) (5.5) (13.4)
----- ----- ----- ------

Total 195.0 150.6 675.3 527.8

(a) Mineral water sales for the first half of 1999 were US$ 12.0
million. Mineral water sales are not reflected for the year 2000 due
to the divestiture of this business in June 1999, except for BAESA's
mineral water sales, which are included in the BAESA line.
(b) Represents consolidated soft drinks and water sales in
Argentina and Uruguay.


Three months ended Nine months ended
September 30th, September 30th,
2000 1999 2000 1999
---- ---- ---- ----
OPERATING PROFIT (LOSS)

Argentina 17.7 22.0 78.7 90.5
BAESA (Argentina and
Uruguay) (2.7) n.a. (4.5) n.a.
Bolivia (1.9) (0.2) (3.0) 1.0
Chile (1.0) (1.3) (2.5) (4.8)
Paraguay 6.1 5.8 23.5 20.7
Uruguay (0.3) 0.1 1.6 1.8
Corporate headquarters
& consolidation
adjustments (2.5) (2.2) (5.0) (5.6)
----- ----- ----- -----

Total 15.4 24.2 88.8 103.6


Quilmes Industrial (Quinsa) S.A.
TOTAL VOLUME SALES
including exports
(in thousands of hectoliters)

Three months ended Nine months ended
September 30th, September 30th,
2000 1999 2000 1999
---- ---- ---- ----

Argentina
Beer 1,588 1,774 5,702 5,973
Water (Eco de los Andes) 0 0 0 340
Soft drinks (BAESA) 1,033 n.a. 3,312 n.a.
Water (BAESA) 131 n.a. 436 n.a.
Bolivia
Beer 102 132 305 389
Chile
Beer 80 66 274 237
Water 2 3 9 7
Paraguay
Beer 310 313 1,096 1,012
Soft drinks and water 282 331 978 1,114
Uruguay
Beer 57 70 237 229
Water 5 8 23 30
Soft drinks (BAESA) 55 n.a. 209 n.a.
Water (BAESA) 35 n.a. 138 n.a.
Interarea sales (13) (27) (78) (118)
---- ---- ---- -----

Total 3,667 2,670 12,641 9,213


Quilmes Industrial (Quinsa) S.A.
UNAUDITED CONSOLIDATED BALANCE SHEET - SUMMARY
(U. S. Dollars in millions)

As of September 30th,
2000 1999
---- ----
ASSETS
Cash, Cash Equivalents and
Government Securities 48.2 80.6
Inventories 125.2 134.8
Accounts receivable 100.3 63.5
Other Current Assets 94.3 17.7
---- ----
Total Current Assets 368.0 296.6
Property, Plant and Equipment, Net 688.2 618.7
Other Assets 330.3 116.8
----- -----
Total Assets 1,386.5 1,032.1

LIABILITIES AND SHAREHOLDERS' EQUITY
Short-Term Bank Debt 305.3 81.2
Long-Term Bank Debt 81.4 15.1
Other Liabilities 221.0 190.7
----- -----
Total Liabilities 607.7 287.0
Minority Interest 156.4 181.0
Shareholders' Equity 622.4 564.1
----- -----
Total Liabilities and Shareholders Equity 1,386.5 1,032.1