EUROPEAN UNION

Unit case volume growth in the European Union Group was flat in 2005, despite growth within light carbonated soft drinks of 5 percent and especially strong performance within the noncarbonated sector in the Central Europe Division and the Iberian Division.

While sales in Northwest Europe in particular have been negatively affected by a soft economy, retailer consolidation and shifts in consumer preferences, we are adapting our strategic initiatives to these challenges. In Germany, we are working on restructuring our business and have gained additional product availability in the key discounter channel.

In 2005, we relaunched our zero-added-sugar carbonated soft drinks as "Z" in Great Britain, which contributed to 7 percent unit case volume growth in the light carbonated soft-drink category. Also, as part of our ongoing drive to offer consumers a wide choice of beverages, we have expanded our Minute Maid portfolio. In our Northwest Europe Division, this has contributed to 5 percent unit case volume growth across the juice and juice drink category.

		We are focused on improving execution across our system, including creating more efficient routes to market. Our Vienna-based information technology team has developed a new handheld bMobile system that is helping to increase the capability and effectiveness of the teams at one of our bottling partners in the European Union. The solution is designed to automate and optimize sales and delivery tasks.
	We are committed to addressing societal problems where we can be part of the solution and have focused on contributing to the fight against obesity in Europe. We are engaging in public-private partnerships and self-regulation initiatives and have formalized responsible advertising and commercial practices with commitments to the European Commission.