RE: Young & Co's Brewery

Guinness Peat Group PLC
5 July 2002


For Immediate Release                                          5 July 2002


                            GUINNESS PEAT GROUP plc

               LETTER TO THE CHAIRMAN OF YOUNG & CO'S BREWERY PLC


Blake Nixon, UK Executive Director of Guinness Peat Group plc ('GPG') has
written to Mr John Young, Chairman of Young & Co's Brewery PLC ('Young'), in
support of GPG's resolutions for the forthcoming Young Annual General Meeting.
GPG currently holds 23.3% of Young's 'A' ordinary share capital.



The full text of the letter follows below.



TEXT OF LETTER FROM BLAKE NIXON TO JOHN YOUNG, CHAIRMAN OF YOUNG & CO'S 
BREWERY PLC.




Dear Mr Young,



Shareholders are well aware that at recent years' Young & Co's Brewery ('Young')
Annual General Meetings non-family shareholders have voted overwhelmingly in
support of those resolutions for the regularisation of the Company's share
capital proposed by Guinness Peat Group plc ('GPG'). In light of this we felt it
appropriate to again this year put the proposals to shareholders,
notwithstanding the Board's refusal to date to take any actions in this regard.
Perhaps this inaction is unsurprising since Young's current voting structure
precludes a majority of its share capital from removing directors.



In summary, simplification of its share capital would allow Young to become a
properly focussed and truly commercial operation and would inevitably lead to
significantly improved results and share prices.



Our third and fourth resolutions will enable the Company to repurchase its
listed shares and thereby provide a definitive mechanism through which to
promote the process of unlocking value for all shareholders. The merit of Young
repurchasing its shares, which are today selling at a 35% discount to their net
asset value, versus buying fully priced assets in the open market is undeniable.



The detailed rationale behind these proposals has been set out in letters
circulated with our resolutions in past years. We should be more than happy to
provide copies of these letters to any Young shareholder and can be contacted on
020 7484 3370.



This year, given the continuing concerns we have regarding the Group's
operation, GPG has also proposed that I be elected a director of the Company.
Our direct involvement would provide the impetus which we feel is currently
lacking for meaningful action to correct Young's inadequate return on capital,
and to deliver shareholder value in a timely manner. My appointment would also
allow closer scrutiny of a further unsatisfactory aspect of Young's affairs,
previously uncommented on, which we describe below.



The principal assets of the Ram Brewery Trust ('RBT') as at 17 May 2002 were
1,858,500 'B' shares representing 14.35% of the equity share capital of the
Company but, importantly, carrying at present 25.65% of the votes. The RBT has
been established for many years and consists of a 'Pension Account' and a '
General Account'.



Shareholders will recall that in January the Board wrote to them in connection
with a change of the Company's Articles to enable the Pension Account to remedy
its funding which, but for the prescribed 'grace period', was insufficient to
meet the minimum requirement set out in pensions legislation. Notwithstanding
the various share transfers that have since taken place, the Pension Account
retains a concentration of self-investment in the Company's shares which is
significantly greater than generally accepted prudent levels or indeed would be
allowable under legislation were the 'B' shares listed.



The General Account is stated to exist to promote the involvement of the
employees of the Company in its affairs. Whilst this altruistic objective seems
at first blush uncontroversial the reality is somewhat different. The Young
Profit Sharing Scheme, (the principal role of the General Account) is not a
normal share scheme but instead a 'Phantom' scheme: that is, for so long as the
RBT exists, employees in the scheme never actually acquire ownership of the
underlying shares nor the right to exercise the votes attaching to them. The
same economic and legal position for their employees is generally achieved by
most companies via a simple contract. The associated shares, carrying
approximately 12.7% of the voting capital (allowing for the so called
unallocated shares), owned by the RBT are, in fact, more in the nature of what
is known in the US as Treasury Stock. Furthermore, it does not seem any
coincidence that the RBT, funded by your Company, has purchased a very
substantial portion of the 'B' shares sold in the past decade by members of the
Young family.



The key issue that arises, accentuated by the total lack of clarity as to who
appoints the RBT Trustees, and the fact that two of the three are respectively
the Company's Chairman and Deputy Chairman, (the other being the Chairman's
brother), is the appropriateness of the RBT voting on resolutions, such as ours,
that concern the long term interests of shareholders. Since we can only assume
that the Board appoints the Trustees the scope for abuses is obvious. The effect
is to magnify the deleterious nature of the current share structure under which
the 'B' shareholders, whilst having the power to appoint the entire Board, only
own 31.9% of the share capital and therefore are exposed to only 31.9% of the
estimated £4m-£5m underperformance caused by the Brewery's poor economics. The
combination of the RBT and the share structure makes it exceedingly difficult,
if not impossible, for the independent directors to ensure they can effectively
represent the public shareholders, who are forced to bear 68.1% of this
shortfall.



Contrary to Young's misrepresentation of my comments regarding the future of its
archaic share structure, our proposals have consistently been made with only one
objective in mind - lifting Young's share price to a level commensurate with the
substantial underlying value of the Group. The resolutions we have proposed for
this year's AGM represent a further opportunity for independent shareholders to
reiterate their desire that Young adopt a structure which will secure its
future. We strongly commend them to the Board and all shareholders.



Yours sincerely



Guinness Peat Group plc
Blake A Nixon



                                    - Ends -




Enquiries:



Guinness Peat Group plc                                        020 7484 3370
Blake Nixon, UK Executive Director



Weber Shandwick Square Mile                                    020 7950 2800
Kevin Smith / Josh Royston




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