Summer in the Private Label Style

JULY 18, 2006, MOSCOW – Pharmacy Chain 36.6 [MICEX: RU14APTK1007; RTS: APTK] is expanding the 36.6 private label portfolio.

The Private Label project was launched in August 2005 and has expanded to include production of 45 SKU’s under the 36.6 brand that cover the most popular pharmacy items. Since early 2006 the sales of products under the 36.6 brand have grown an average of 16% each month, with the monthly sales volume exceeding $150,000. For the time being sales of 36.6 brand products comprise 0.5% of the pharmacy chain’s sales. 36.6 brand products are currently sold in 95% of the chain’s pharmacies.

Pharmaceuticals

In July 2006, the first set of pharmaceuticals under the 36.6 brand will appear on the shelves of the chain’s pharmacies. Customers will be offered 6 OTC drugs that are the core components of a household medical kit, includingparacetamol, acetylsalicylic acid, an antihistamine agent (loratadine), an antifungal drug (flukonazol), antidiarrheal medicine (loperamide) and an antispasmodic agent (drotaverine). All pharmaceuticals have been registered with the Ministry of Health of the Russian Federation and are produced at Veropharm’s Belgorod plant.

Parapharmaceuticals

Pharmacy Chain 36.6 is also expanding its parapharmaceutical portfolio. July will see the launch of sales of individually packed antiseptic napkins (4 SKU’s). The Company has redesigned the packaging and expanded product range of its condoms, offering consumers a new color and fragrance series. In the health food segment we offer consumers two types of sugar substitutes under the 36.6 brand. In August 2006, the chain will launch sales of pregnancy tests (3 items). Sales of cotton, wool and paper hygiene products, including paper napkins, cotton buds and pads – a total of 5 SKU’s – will also begin this summer.

Distribution

Private label products are sold across all the 36.6 branded stores. In May 2006, Pharmacy Chain 36.6 launched sales of the 36.6 brand products in the pharmacies of the chain that are not operating under the 36.6 brand yet. The project envisages installation of 36.6 implants in the non-branded pharmacies, including closed-type pharmacies. An implant is a visually detached section of the pharmacy decorated in the 36.6 brand style and featuring products of the brand. The implants have been implemented in 175 pharmacies.

Oleg Anikin, Strategy Director, Pharmacy Chain 36.6:

“The project of product portfolio expansion with 36.6 brand products is developing actively and successfully. Pharmacy Chain 36.6 is the only pharmacy chain in Russia that has been able to start production and launch sales of pharmaceuticals under its own brand. An exclusive portfolio enables the Pharmacy Chain to differentiate its product offering from those of the other players on the retail market. Private Label portfolio also allows us to offer high-quality pharmaceuticals and health&beauty products at very favorable prices to a wide spectrum of consumers.”

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Press-release