Doc re. Coats Group Ltd

Guinness Peat Group PLC
20 September 2007



                            Guinness Peat Group plc


GPG's subsidiary, Coats Group Limited, has issued the following statement in
relation to the European Commission's decision on fasteners.



Richard Russell
Company Secretary
Guinness Peat Group plc


20th September 2007


Contacts:

Mike Smithyman, CEO Coats Group Limited        UK             00 44 20 8210 5168

Gary  Weiss, Chairman Coats Group Limited      Australia      00 61 2 8298 4305




20th September 2007


European Commission Fasteners Decision

In relation to the European Commission's decision on fasteners announced
yesterday, Coats notes that full details of the Commission's reasoning are not
yet available. In the interim, Coats has the following comments on the decision:



• Coats notes the Commission's allegation that between April 1998 and
  November 1999  European zip manufacturers exchanged price information and in
  respect of which the Commission has fined Coats EUR 12.2 million. Coats has at
  all times fully co-operated with the Commission's investigation into the
  fasteners market and will carefully study the Commission's conclusions once
  details are made available before determining whether to appeal against this
  aspect of the Commission's decision.


• Coats totally rejects the Commission's allegation of a market sharing
  agreement with Prym in the European haberdashery market and in respect of 
  which Coats has been fined EUR 110.3 million. During the investigation Coats 
  presented the Commission with ample evidence which refuted this allegation and
  demonstrated that in any event a fine was time-barred. Contrary to its rights
  under the European Convention on Human Rights, Coats was not permitted to
  examine the witness who made this allegation. Coats will vigorously appeal the
  decision to the Court of First Instance once the full details of the
  Commission's decision have been made available. The Court of First Instance 
  last week quashed a large part of the Commission's factual findings in the 
  Needles case for want of proof or clear misinterpretation of the evidence by 
  the Commission. We have confidence in the impartial, judicial analysis that 
  the Court applies. As well as rejecting the substance of the decision, Coats
  believes that the size of the fine is grossly disproportionate to any possible
  impact that such an agreement could have had on the European haberdashery
  market. Our customers have certainly not been injured.


•  Subject to a review of the details, once received, of the Commission's
   decision, Coats remains of the view that any anticipated eventual payment of
   fines is adequately covered by existing provisions. A guarantee for the 
   original amount of the fine will be posted for the duration of the appeal. 
   Only once we have completed the appeal process will payment of any fine, as 
   finally determined by the Court, be made.

•  It should be noted that the alleged contraventions occurred many years ago, 
   between 1977 -1999, prior to the acquisition of Coats by the GPG Group and
   do not involve any current members of the Coats Board or management team.  
   Anti-competitive behaviour goes directly against company policy and 
   represents a serious disciplinary offence.

•  It should be stressed that this legacy issue has no impact on Coats current 
   operations which continue to make good progress. Coats acknowledges the full 
   support of its shareholder GPG and its role in the successful development of 
   the business over the last four years.




                      This information is provided by RNS
            The company news service from the London Stock Exchange