'Cape Town, 25 October 2006: Woolworths concerned about quota process and outcome. “We don't believe that quotas can do anything to alleviate the difficulties experienced by an inefficient and heavily protected industry except disrupt the market and drive prices upward.” said Simon Susman, CEO of Woolworths, commenting on the dti’s recently released quota regulations. “Woolworths has always been and continues to be a strong supporter of South Africa and local industry – this is clearly in line with government's growth objectives – but we have also been clear that we are not in favour of intervention in the market.” Woolworths firmly favours more sustainable solutions which ensure that the inflationary impact for the consumer is minimised. These solutions must include all stakeholders working together to make this industry more productive and flexible, and therefore competitive. Woolworths continues to source from local South African manufacturers who have worked closely with Woolworths to produce high quality product at competitive values using the latest technology. “As a passionately South African retailer we are committed to sourcing locally wherever we can, with the end goal being to provide our customers with quality goods at the right price. Buying local has always made sense to us; indeed over 65% of our clothing is sourced from South African suppliers,” said Susman. The recently released quota regulations from the dti are based on seriously disputed job loss figures yet will have a significant effect on the economy, on inflation and on Woolworths business for the following reasons: i.Inflation Neither Woolworths, nor our competitors, can source product from anywhere in the world at better values than those currently available out of China. South African producers lack the capacity and technology to match this competition. Consumers will seek best value from wherever they can find it and Woolworths will source accordingly, finding the right product at the right price. ii.Added complexity Quotas will create an environment in which corruption and profiteering will be rife, thus requiring additional state resources for monitoring and control. The degree of congestion that will be experienced at the ports is also unknown but possibly high. The additional complexity in Woolworths business will require fundamental changes in Woolworths sourcing process. iii.Timing The tight timing of the introduction of the quotas will mean that we may not be able find alternative sources of supply in time to meet all consumers needs for 2007. We will experience difficulty with product supply in key categories. iv.Fabrics Including fabrics in the quota regulations has real potential to cause further job losses in local clothing manufacturing. ”We further remain convinced that under no circumstances can the capacity available in South Africa compete with what is available out of China, either from a volume perspective or in terms of technology and value,” said Susman. Woolworths will continue to engage directly with the dti in order to minimise the unintended consequences of the quota, and ensure that our customers get the best possible value. Ends

“We don't believe that quotas can do anything to alleviate the difficulties experienced by an inefficient and heavily protected industry except disrupt the market and drive prices upward.” said Simon Susman, CEO of Woolworths, commenting on the dti’s rece