UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

Form 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2000

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to _______

Commission File Number 0-24341

CENTRAL EUROPEAN DISTRIBUTION CORPORATION
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(Exact name of registrant as specified in its charter)

DELAWARE 54-1865271
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(State or other jurisdiction (I.R.S. employer identification no.)
of incorporation or organization)

343 MAIN STREET, SUITE 301, SARASOTA FLORIDA 34236
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(Address of principal executive offices) (Zip code)

Registrant's telephone number, including area code: (941) 330-1558

Securities registered pursuant to Section 12(b) of the Act:
Not Applicable
Securities registered pursuant to Section 12(g) of the Act.

COMMON STOCK, PAR VALUE $0.01 PER SHARE
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Title of Class

Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge in definitive proxy or information
statements incorporated by reference in Part III of the Form 10-K or any
amendment to this Form 10-K. [ ]

The aggregate market value of the voting stock held by non-affiliates
of the registrant (based on the closing price of the registrant's common stock
on the Nasdaq National Stock Market) on March 27, 2001 was $7,553,508.*

As of March 23, 2001, the registrant had 4,338,256 shares of common
stock outstanding.

Documents Incorporated by Reference

Portions of the proxy statement for the annual meeting of stockholders to be
held on April 30, 2001 are incorporated by reference into Part III.

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* Solely for purposes of this calculation, all directors and executive
officials of the registrant and all stockholders beneficially owning more
than 5% of the registrant's common stock are considered to be affiliates.

TABLE OF CONTENTS

PART I
PAGE
---

Item 1. Business 4

Item 2. Properties 18

Item 3. Legal Proceedings 19

Item 4. Submission of Matters to a Vote of Security-Holders 19

PART II

Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters 19

Item 6. Selected Financial Data 20

Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 21

Item 7A. Quantitative and Qualitative About Market Risk 24

Item 8. Financial Statements and Supplementary Data 46

Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 46

PART III

Item 10. Directors and Executive Officers of the Registrant 46

Item 11. Executive Compensation 46

Item 12. Security Ownership of Certain Beneficial Owners and Management 46

Item 13. Certain Relationships and Related Transactions 46

PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports
on Form 8K 97

Signatures 50

THIS ANNUAL REPORT ON FORM 10-K CONTAINS CERTAIN STATEMENTS THAT ARE
NOT HISTORICAL FACTS AND MAY BE FORWARD-LOOKING. SUCH STATEMENTS INVOLVE
ESTIMATES, ASSUMPTIONS, RISKS AND UNCERTAINTIES. THERE IS NO ASSURANCE THAT

FUTURE RESULTS WILL NOT DIFFER MATERIALLY FROM THOSE EXPRESSED IN THE
FORWARD-LOOKING STATEMENTS. IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO
BE MATERIALLY DIFFERENT FROM THE FORWARD-LOOKING STATEMENTS ARE DISCLOSED UNDER
THE HEADING "BUSINESS - RISK FACTORS" AND THROUGHOUT THIS FORM 10-K.

PART I

ITEM 1. BUSINESS

GENERAL

The registrant ("CEDC"), and its wholly owned subsidiaries, Carey Agri
International Poland Sp z.o.o., ("Carey Agri"), Multi Trade Company (MTC) The
Cellars of Fine Wines, ("PWW", "CFW" ), which were acquired during 1999, and
Polskie Hurtownie Alkoholi (PHA), are referred to herein jointly as the
"Company." PWW was acquired in 1999 and PHA, in 2000. See Note 10 to the note to
the consolidated financial statements.

The Company, formed in 1990, is a leading importer and distributor of
alcoholic beverages in Poland. The Company operates the largest nationwide
next-day alcoholic beverage delivery service in Poland through its seventeen
regional offices located in Poland's principal cities, including Warsaw, Krakow,
Gdynia and Katowice. The Company currently distributes approximately 330 brands
in three categories: beer, spirits and wine. The Company imports and distributes
seven international beers, including GUINNESS, CORONA, MILLER, FOSTER'S and
BECK'S PILSNER. The Company currently distributes approximately 1000 spirit
products, including leading international brands of scotch, single malt and
other whiskeys, rums, bourbons, vodkas, tequilas, gins, brandys, cognacs,
vermouths and specialty spirits, such as JOHNNIE WALKER, SMIRNOFF, ABSOLUT,
FINLANDIA, BACARDI, GORDON'S LONDON DRY and TANQUERAY.

In addition, the Company imports and distributes 555 wine products,
including, BPH ROTHSCHILD, TORRES, BOLLA, CONCHA Y TORRO, PENFOLDS, SUTTER HOME,
GEORGES DUBOEUF, MONDAVI, VEUVE CLICQUOT AND CONDORNIUM. In addition to its
distribution agreements with various alcoholic beverage suppliers, the Company
is the exclusive importer for Dunhill Cigars and Evian Waters.

The Company distributes its products throughout Poland to approximately
4,750 outlets, including off-trade establishments, such as small businesses and
multi-store retail outlets where alcoholic beverages are not consumed on
premises, and on-trade locations, such as bars, nightclubs, hotels and
restaurants, where such products are consumed.

INDUSTRY OVERVIEW

CONSUMPTION. In 2000, Poland was the fourth largest consumer of vodka in
the world. The total market for alcoholic beverage products in Poland was
approximately $3.5 billion in 2000 at the retail level. Traditionally, the
population of Poland has primarily consumed domestic vodka, but in recent years
there has been a general shift in the population's consumption habits from vodka
to other types of alcohol that are primarily imported, such as beers, wines and
spirits. The shift in consumption habits in Poland is a result of: (i)
stabilization of the Polish economy, including increased wages as well as a
decrease in the rate of inflation from 250% in 1990 to 9.8% in 1999 and 8.5% in
2000; (ii) an increase in tourism, which has created a demand for imported
products; (iii) an increase in multinational firms doing business in Poland,
which has brought both capital into the country and new potential customers for
the Company's products; and (iv) increased availability and decreased real
prices for imported products.

DISTRIBUTION. Currently, the market for the distribution of alcoholic
beverages in Poland is highly fragmented. There are numerous distributors spread
throughout the country, all delivering primarily one type of product (I.E.,
domestic vodka). Furthermore, distributors have been located regionally, rather
than nationally, due to the difficulties in establishing a nationwide
distribution system, including the capital required to set up such a system.
Distributed alcohol is delivered to both off-trade sites and on-trade sites.
Off-trade sites include Polish-owned and managed businesses such as small
grocery stores as well as major chain stores. On-trade sites include bars,
nightclubs, hotels and

restaurants. There has been a trend to consolidate many off-trade sites, which,
would be classified as "mom and pop" stores as well as a trend toward expanding
major chain stores. This consolidation of chain stores is also apparent in the
rapid expansion of petrol stations, which are owned and operated by major
international companies, such as Shell, BP and Statoil. Many of these petrol
stations have convenience stores, which sell all types of alcoholic beverages
and in many areas, serve as local convenience stores. The Company believes that
it is well positioned to take advantage of both the trends in consumption and
distribution.

BUSINESS STRATEGY

The principal components of the Company's business strategy are as follows:

EXPAND DISTRIBUTION CAPACITY. The Company plans to continue increasing its
distribution capacity by expanding the number of its regional offices in Poland
through the acquisition of existing wholesalers, particularly in areas where the
Company does not distribute directly. During the first quarter of 2000, the
Company acquired substantially all the assets of PHA in southwestern Poland. PHA
was a major regional competitor of the Company with approximately $43.0 million
in sales.

The Company will seek to acquire additional successful wholesalers, which
are primarily involved in the vodka distribution business and are among the
leading wholesalers in their region. The Company would then add its higher
margin imported brands to complement and enhance the existing product portfolio.
While the Company has identified additional potential wholesalers and has
conducted exploratory talks about such acquisitions, it has not reached any
definitive agreements regarding the terms and conditions of any such
acquisition, including the purchase price to be paid to the sellers, and such
additional acquisitions may not be available to the Company on acceptable terms,
if at all. In such case, the Company would seek to enter these markets with its
own regional offices.

INCREASE PRODUCT OFFERINGS. The Company acquired one of Poland's leading
premium wine importers in May of 1999. PWW is a high quality wine importer,
which offers a wide selection of specialty wines such as Penfolds, Concha y
Toro, Mondavi, Torres, and BARON ROTHSCHILDS. In 2000 the Company added Becks
Beer, Fresco Baldi, and Offley Port. The Company is also in exploratory talks to
import additional alcoholic and non-alcoholic products.

EXPAND RETAIL MARKET. In 2000, the Company opened its third retail outlet,
launched a direct mail catalogue, and constructed an e-commerce infrastructure
to complement its nationwide distribution system. The Company is now renovating
a fourth retail site in Warsaw, which is expected to open in April 2001. This
expansion in the retail sector facilities higher awareness and hence improved
sales of the Companies premium wine and spirits imports.

The Company believes that specialty retails sales of alcoholic beverages in
Poland have yet to be developed. Currently, alcoholic beverages are sold through
grocery stores, supermarkets, small shops and gas stations. These retail outlets
sell, in general, fast moving items, primarily domestic beer and vodka, as well
as a small number of the more popular selling imported products, which are
brands often imported by the Company.

HISTORY

CEDC's subsidiary Carey Agri was incorporated as a limited liability
company in July 1990 in Poland. It was founded by William O. Carey, who died in
early 1997, and Jeffrey Peterson, the Company's Vice Chairman and Executive Vice
President. Mr. Carey's son, William V. Carey, is the managing director of Carey
Agri and the President and Chief Executive Officer of CEDC. In February 1991,
Carey Agri was granted its first import license for FOSTER'S LAGER, which it
sold to wholesalers. With this beverage, Carey Agri sought to offer a desirable
product for which it had an exclusive import license to the market segment of
the Polish population who were benefiting from the country's market
transformation. Because of Carey Agri's initial success with FOSTER'S LAGER, for
which it still holds the exclusive import license for Poland, it quickly
diversified in 1992 by importing other quality brand beers from Europe and the
United States. Sales during this period were typically in high volume
consignments to other wholesalers.

In 1993, with the acceleration of the privatization of retail outlets in
Poland, Carey Agri began to implement a systematic delivery system in Warsaw
which could deliver alcoholic beverages to retail outlets on a reliable basis.
Carey Agri leased a warehouse, purchased trucks and hired and trained
operational personnel and began to sell directly to convenience shops, small
grocery stores and newly opened pubs. Because of this business experience, Carey
Agri was prepared to take advantage of the opportunity to expand its import and
delivery capacity in Warsaw when a large,

foreign-owned supermarket chain began operations in 1993, creating a significant
increase in the demand for the Company's product line. The Warsaw model of
desirable product lines and dependable prompt delivery of product was duplicated
by the Company in Krakow (1993), Wroclaw (1994), Szczecin (1994), Gdynia (1994),
Katowice (1995), Torun (1995), Poznan (1996), Bialystok (1999) with the
acquisition of MTC, and in Zielona Gora (2000) with the acquisition of PHA, and
Lublin in June of 2000.

CEDC was incorporated in Delaware in 1997. In July 1998, the Company issued
2,000,000 shares of Common Stock in an Initial Public Offering on the Nasdaq
Smallcap Market raising net proceeds of approximately $10.6 million. During June
of 1999 the Company was accepted onto the Nasdaq National Market where it trades
under the symbol CEDC.

PRODUCT LINE

The Company currently offers over 350 brands of beverages in five
categories: (a) beers; (b) spirits; (c) wines; (d) soft drinks and (e) cigars.
Its brands of imported beer accounted for 15.9%, 6.0% and 4.1% of net sales
revenues during the twelve month period ended December 31, 1998, 1999 and 2000,
respectively. Spirits accounted for 32.0%, 79.1% and 81.8% of net sales revenues
for the same periods. Sales of Polish vodka in the twelve-months ended December
31, 2000 accounted for 84.5% of net sales revenues in the spirits category and
exclusive imported spirits accounted for 5.0%, the remaining being non-exclusive
spirit products. Wine accounted for 7.0%, 7.2%, and 11.5% of net revenues for
the same periods. Sales of other products were insignificant during the year
ended December 31, 2000.

The Company has agreements with many of the companies from which it
acquires products for sale. Certain products, however, have never been covered
by a written agreement. The Company does not believe that the absence of such
written agreements is likely to result in an adverse financial effect on the
Company because the Company has long-standing relationships with such suppliers.

BEER

The Company distributes imported beer through each of its regional offices.
BUDWEISER BUDVAR, GUINNESS, CORONA, FOSTER'S LAGER, KILKENNY, MILLER GENUINE
DRAFT AND BECK'S PILSNER are distributed throughout Poland on an exclusive
basis.

Most of the Company's distribution contracts for beer contain a minimum
purchase requirement and typically permit termination if the Company breaches
its agreements, such as failure to pay within a certain time period or to
properly store and transport the product. Trade credit is extended to the
Company for a period of time after delivery of products. The duration of these
agreements differ.

SPIRITS

The Company distributes all its imported spirit products through each of
its offices, mostly on a nonexclusive basis. The spirit products sold by the
Company include the following: cotch Whisky:

Johnnie Walker, Black, Blue, Black & White
Gold and Red Labels The Dimple
Haig White Horse
Chivas Regal VAT 69
Ballantines Finest Teacher's Highland Cream
Ballantines Gold Seal Old Smuggler
J&B Rare Whyte and McKay

Single Malt Whisky: Dalmore Bruichladdich
Cragganmore Glenkinche
Dalwhinne Oban
Lagavulan Talisker
Isle of Jura Cardhu

Rum: Bacardi Light, Gold and Black
Captain Morgan Malibu

Other Whiskey: Blenders Pride Crown Royal
Seven Crown Black Velvet
Canadian Mist

Bourbon: Jack Daniel's Tennessee Whiskey
Jim Beam

Vodkas: Smirnoff Absolut Blue
Citron and Kurant Finlandia
Tanqueray Polish Vodkas

Tequila: Jose Cuervo Sierra*

Gins: Gordon's London Dry Beefeater
Tanqueray

Brandy: Metaxa Sandeman Capa Negra
Raynal Stock *

Cognacs: Hennessy Courvoisier
Martell Camus Cognac *

Vermouths: Stock Blanco*, Rosa and Cinzano Blanco, Rosso, Rose,
Extra Dry Martini Bianco, Extra Dry, Americano, Orancio
Rosso, Rose, Extra Dry

Specialty Spirits: Bailey's Irish Cream Carolan's Irish Cream
Kahlua Coffee Liqueur Grand Marnier
Bols Liquors
Jagermeister Archer's
Cana Rio* Mandarine Napoleon *

* Denotes exclusive importation.

In 2000 the Company had net sales of over 5% from the following
suppliers; Polmos Bialystok (23.3%), Bols (12.3%), Polmos Poznan (11.7%), Polmos
Zielona Gora (8.8%) and Belvedere (5.0%). The Company has 1 year supply
contracts with each of the named companies but this is standard practice
throughout the industry. The Company believes we approximately 110% market share
that these contracts will be renewed.

The Company's agreements with various state-owned Polish vodka producers
may be terminated by either party without cause with one months prior written
notice. Products are delivered based on the Company's standard order forms.

WINE

The Company offers 54 brands of wine encompassing 555 products on an
exclusive basis: During 1998 the Company offered two brands encompassing 34
products. The additional exclusive wines were a result of the acquisition of
PWW. These wines, which include standard red and white varieties, are offered
through all of the Company's regional offices. The Company also offers on a
non-exclusive basis the following sparkling wines and champagnes: CINZANO ASTI,
GRAN CINZANO, GRAN FESTA, MARTINI ASTI, MARTINI BRUT, MOET & CHANDON DOM
PERIGNON, BRUT IMPERIAL and MUMM CORDON ROUGE.

LIST OF EXCLUSIVE BRANDS FOR PWW BY SUPPLIER

FRENCH WINES SPANISH WINES ITALIAN WINES

B.P.H Rothschild Torres Castello Banfi
Kressmann Jean Leon Frescobaldi
Borie Manoux Vega Sicilia Cecchi
Andre Lurton Bodegas Age Gaja
Jean-Jeann Marchesi di Barolo
De Ladoucette Faustino Villadoria
J. Moreau & Fils Rioja Santa Margherita
Domaine Laroche Ramos Pinto Calinto
Louis Latour Bolla
Domaine la Chevaliere
Georges Dubouef Condornium
Faiveley
Leon Beyer
M. Chapoutier
Ogier

CALIFORNIAN CHILEAN AUSTRALIAN

Mondavi Concha y Torro Penfolds
M. Torres M. Torres
Trinchero Estates
Robert Mondavi
Sutter Home
Savona
Fetzer

OTHER CHAMPAGNES

Lenz Mozer - Austrian Veuve Clicquot
Morhena - German Krug
Boutari - Greek

SALES AND MARKETING

As an early entrant in the post-Communist market in Poland, the Company has
over ten years of experience in introducing, developing and refining marketing,
sales and customer service practices in the diverse and rapidly developing
Polish economy, which it believes is a competitive advantage in the alcoholic
beverage distribution business.

The Company employs approximately 125 salespeople who are assigned to one
of its seventeen regional offices. Each regional office has a sales manager, who
may also be the office manager, who meets with the salespeople of that office on
a daily basis to review products and payments before the salespeople begin
calling on customers. The sales force at each office is typically divided into
three categories: (a) vodka accounts; (b) import accounts; and (c) key accounts.
Salespeople, who are paid on commission, return to the office later in the day
to process orders so that products can be dispatched the next morning.

DISTRIBUTION SYSTEM

The Company's headquarters are located in Warsaw, the capital of Poland,
with regional centers in Bialystok and Zielona Gora. Sales and service offices
are presently located in seventeen major cities in central, north, south and
western Poland. The Company estimates that it currently reaches 43% of Poland's
population through direct sales and distribution based on census data as of June
30, 1998. Other areas in Poland are served through arrangements with
wholesalers. See "Business Strategy."

The Company has developed its own centrally controlled, national next-day
distribution system for its alcoholic beverage products, and has the ability to
leverage its distribution to include non-alcoholic beverage products in its
system. The Company believes that it is the only independent distribution
business, which currently has this capability in Poland. For imported products,
the distribution network begins with a central bonded warehouse in Warsaw.
Products can remain in this warehouse without customs and other duties being
paid until the product is actually needed for sale. At such point, the product
is transferred to the Company's consolidation warehouse at the same location or
shipped directly to one of the regional office warehouses connected to each of
the Company's sales locations outside of Warsaw. Based on current sales and
projections, the regional offices are provided with deliveries on a weekly or
bi-weekly basis so that they are able to respond to their customers' needs on a
next-day basis.

For products which the Company delivers for others who themselves import
the products into Poland, the distribution chain begins at the Company's
consolidation warehouse in Warsaw. From there, the product is delivered to
customers using the same procedures as described above.

Except at peak periods during the summer holidays and other similar times
such as Christmas, all deliveries are made by Company-trained employees using
Company-owned vehicles. During such busy periods, the Company relies on
independent contractors, which are usually small family-run businesses with
which the Company has had relationships for several years.

MARKET FOR PRODUCT LINE

In the year ended December 31, 2000, approximately 63% of the Company's
total sales were through off-trade locations where the alcoholic beverages are
not consumed, another 17% through on-trade locations where the alcoholic
beverages are consumed, and the other 20% through other wholesalers.

OFF-TRADE MARKET

There are two components of the Company's sales to locations where
alcoholic beverages are not consumed on premises. The most significant are
small, usually Polish-owned and managed businesses, including small grocery
stores. At December 31, 2000, the Company sold products to approximately 2900
such business outlets, which typically stock and sell relatively few alcoholic
beverage products and wish to have access to the most popular selling brands.
The other components of the off-trade business are large supermarket chains,
which are typically non-Polish-owned, as well as smaller multi-store retail
outlets operated by major Western energy companies in connection with the sale
of gasoline products. The large supermarket chains typically offer a wide
selection of alcohol products, while the smaller retail outlets offer a more
limited selection.

ON-TRADE MARKET

There are three components to the Company's sales to locations where
alcoholic beverages are consumed: sales to (i) bars and nightclubs; (ii) hotels;
and (iii) restaurants. Bars and nightclubs are usually locally managed
businesses, although they may be owned and operated in major cities by a
non-Polish national. Hotels include worldwide chains such as Marriott, Sheraton
and Holiday Inn, as well as the major Polish chain, Orbis. Restaurants are
typically up-scale and located in major urban areas. This latter category also
includes two major United States-based restaurant chains, which operate in
Poland.

WHOLESALE TRADE

The Company also sells products throughout Poland through other
wholesalers. There are a few written agreements with these wholesalers.

CONTROL OF BAD DEBTS

The Company believes that its' close monitoring of customer accounts both at the
relevant regional office and from Warsaw has contributed to its success in
maintaining a low ratio of bad debts to net sales. During the years ended
December 31, 1998, 1999 and 2000, bad debt expense as a percentage of net sales
was 0.17%, 0.28% and 0.39% of net sales, respectively. Management believes the
ongoing enhancement of computer systems for interoffice financial and
administrative controls will assist in maintaining a low ratio of bad debts to
net sales as the Company continues to expand. See "Management Discussion and
Analysis for further details.

COMPETITION

The Company, as an early entrant in the post-Communist market in Poland,
has over ten years of experience in introducing, developing and refining
marketing, sales and customer service practices in the diverse and rapidly
developing Polish economy, which it believes is a competitive advantage in the
alcoholic beverage distribution business. The Company believes that it is
currently the only independent national distributor of an extensive and
diversified alcoholic beverage line in Poland. Some of the international drink
companies doing business in Poland, which import their own products but use the
Company on a nonexclusive basis to distribute their products, could develop
nationwide distribution systems, but have not and the Company believes these
companies will concentrate on expanding their sales organizations. These
entities include Seagrams, Diageo plc, Allied Domecq and Bacardi. The Company
was the largest single distributor in 1998, 1999 and 2000 for Diageo plc
products in Poland.

The Company competes with various regional distributors in all of its
offices. This competition is particularly vigorous with respect to domestic
vodka brands. One of the larger, foreign-owned chain stores also sells directly
to smaller retailers. The Company addresses this regional competition, in part,
through offering to customers in the region a single source supply of more
products than its regional competitors typically offer.

The brands of beers, wines and spirits distributed by the Company compete
with other brands in each category, including some the Company itself
distributes. The Company expects this competition to increase as it adds more
brands, as international drinks and brewery companies expand production in
Poland and as the Polish produced products are distributed more efficiently. In
addition, the international drinks companies with which the Company competes in
the import sector of its business have greater managerial, financial and other
resources than does the Company.

DIRECTORS AND EXECUTIVE OFFICERS

The directors and executive officers and their ages of CEDC as of March 15,
2001, are set forth below:

NAME AGE POSITION(S)
----- --- -----------

William V. Carey............... 36 Chairman, President and Chief Executive Officer
Jeffrey Peterson............... 50 Vice Chairman and Executive Vice President
Alan Dickson................... 65 Director
James T. Grossmann ............ 60 Director
Tony Housh..................... 33 Director
Jan W. Laskowski............... 44 Director
Joe M. Richardson.............. 48 Director
Neil Crook..................... 38 Vice President and Chief Financial Officer
Evangelos Evangelou ........... 33 Chief Operating Officer

Directors and executive officers of CEDC are elected to serve until they
resign or are removed, or are otherwise disqualified to serve, or until their
successors are elected. All directors of CEDC are elected annually at the annual
meeting of stockholders. Executive officers of CEDC generally are appointed at
the board's first meeting after each annual meeting of stockholders.

WILLIAM V. CAREY has served as Chairman, President and Chief Executive
Officer of CEDC since its inception. Mr. Carey began working for Carey Agri in
1990 and in 1993 Mr. Carey instituted and supervised the direct delivery system
for Carey Agri's nationwide expansion. Mr. Carey, a 1987 graduate of the
University of Florida, played briefly on the professional golf circuit before
joining the Company. Mr. Carey is a member of the American Chamber of Commerce
in Poland.

JEFFREY PETERSON has served as Vice Chairman, Executive Vice President and
director of CEDC since its inception. Mr. Peterson was a co-founder of Carey
Agri in 1990, and is a member of the management board of that entity. Prior
thereto, Mr. Peterson contracted with African, Middle Eastern, South American
and Asian governments and companies for the supply of American agricultural
exports and selected agribusiness products, such as livestock, feed supplements
and veterinary supplies. Mr. Peterson has worked with international banks and
United States government entities to facilitate support for exports from the
United States.

ALAN DICKSON began his career in the United Kingdom in banking and finance
for 10 years before joining Procter & Gamble in the European Finance Group in
1966. Mr. Dickson progressed through P&G with his final position being that of
Finance Director of the Asia Pacific Division based in Hong Kong. On retiring
from P&G in 1994 Mr. Dickson joined Lion Nathan, a New Zealand based brewer as
CFO. In this position he was involved in upgrading the financial expertise of
the company as well as in establishing a major new brewery in China. Mr. Dickson
is now retired and lives in Scotland.

JAMES T. GROSSMANN, a retired United States foreign-service officer, has
served as a director of CEDC since its inception. With the United States Agency
for International Development ("U.S.A.I.D."), during the years 1977 to 1996, Mr.
Grossmann served in emerging markets in Central Europe, Central America, Africa
and Asia with a concentration on developing private sector trading and
investment through United States government-sponsored aid programs. Immediately
prior to his retirement in 1996, he managed a $300 million mass privatization
and capital markets development program that assisted 14 former state-controlled
countries in Central Europe transition to market economies.

TONY HOUSH, currently a Director of Millenium Capital, a Warsaw based
investment company Mr. Housh was the Director of the American Chamber of
Commerce in Poland where he obtained an in-depth knowledge of the Polish
regulatory framework. Mr. Housh came to Poland with the US Department of the
Treasury as a banking and tax analyst seconded to the Polish Ministry of Finance
where he served from 1994 to 1996.Mr. Housh has extensive experience throughout
the region as a business and regulatory advisor, board memberships of various
multinational organizations such as the Fulbright Commission and is a Salzburg
Seminar fellow. He was first elected to the Board in May 2000.

JAN W. LASKOWSKI has served as a director of CEDC since its inception. Mr.
Laskowski has lived and worked in Poland since 1991. He was the Vice President
and member of the management board of American Bank in Poland ("Amerbank") until
February 1999, a position he had held since 1996, where he was responsible for
business development. Before joining Amerbank in 1991, Mr. Laskowski worked in
London for Bank Liechtenstein (UK) Ltd from 1989 to 1991. He began his career
with Credit Suisse, also in London, where he worked for 11 years.

JOE M. RICHARDSON has served as a director of CEDC since its inception.
Since October 1994, Mr. Richardson has served as the Director of Sales and
Marketing Europe of Sutter Home Winery Inc., where he is responsible for
developing and managing the importation, distribution and sales of Sutter Home
Wines within Europe. From October 1993 until October 1994, Mr. Richardson
assisted Carey Agri in marketing development. Prior thereto, Mr. Richardson had
19 years experience in the wine industry.

NEIL CROOK joined the Company in February 2000 as Vice President and Chief
Financial Officer. From April 1996 to January 2000, he held the position of
Financial Controller in Xerox Polska Ltd, the autonomous subsidiary of Xerox
(Europe) Ltd in Poland. Prior thereto, he worked with Continental Can Polska
where he oversaw the financial operation of the construction of an aluminum can
manufacturing plant. Mr. Crook has six years experience in Poland and is a
United Kingdom registered F.C.M.A.

EVANGELOS EVANGELOU joined the Company in September 1998. From October 1993
until July 1998, Mr. Evangelou was both Assistant Manager and General Manager of
Louis Poland where he was responsible for the day to day operations of all food
and beverage outlets within Warsaw International Airport. Prior to coming to
Poland for Louis, Mr. Evangelou was in food and beverage management in the
United Kingdom.

EMPLOYEES

The Company had approximately 660 full-time employees as of December 31,
2000. Substantially all employees were employed in Poland and, as required by
Polish law, have labor agreements with the Company. The Polish Labor Code, which
applies to each of these agreements, requires that certain benefits be provided
to employees, such as the length of vacation time and maternity leave and a
bonus of a month's salary paid upon retirement. This law also restricts the
discretion of the Company's management to terminate employees without cause and
requires in most instances a severance payment of one to three months salary.
The Company made required monthly payments of 25% of an employee's salary to the
governmental health and pension system and has established a Social Benefit Fund
as required by Polish law, but does not provide other additional benefit
programs. The Social Benefits system was changed under Polish law effective
January 1, 1999, and the employee is now required to make monthly payments of
23% of their salary, but the Company believes that it will not have a material
effect on the Company's earnings. The Company's employees are not unionized. The
Company believes that its relations with its employees are good.

REGULATION

The Company's business of importing and distributing alcoholic beverages is
subject to extensive regulation. The Company believes it is operating with all
licenses and permits material to its business. The Company is not subject to any
proceedings calling into question its operations in compliance with any
licensing and permit requirements.

IMPORT OF PRODUCTS

IMPORT LICENSE

The Company must receive a license from the Minister of Economy to be able
to import all of its alcoholic beverages except for the beer and wine brands.
The current license was issued for the period from July 1, 1998 until December
31, 2000. While in certain circumstances prescribed by Polish law, the Minister
of Economy has discretion to withdraw the import license or limit its scope, the
Company believes that such license will remain effective as long as the Company
abides by the conditions set forth therein, including, in particular, regular
reporting to the Minister of Economy on the volume of imports. The Company must
also apply each year for a license to import cigars. The Company has obtained a
license, which expires on December 31, 2001.

IMPORT PERMITS

Additionally, import permits must be obtained for specific consignments of
alcoholic beverages to be imported under the import license as well as under
customs quotas. See "--Customs Duties and Quotas." The Company must obtain such
permits for all its imported alcoholic beverages except for the beer and wine
brands. The application for a permit is usually made when products are ordered
and must specify the product, amount of product and source country. Permits are
issued for three months, and the Company must demonstrate to appropriate
officials that each consignment it imports is covered by a permit. Similar
permits must be obtained for the import of cigars.

APPROVAL OF SANITARY AUTHORITIES

Local sanitary authorities at the place of import must also be notified of
what alcoholic beverages and cigars are being imported into Poland. This
notification is typically given when a particular shipment of products arrives
in Poland. In general, this notice permits the applicable sanitary authorities
to determine that no product is entering the Polish market without having been
previously approved for sale in Poland. See "--Wholesale Activities--General
Norms."

WHOLESALE ACTIVITIES

The Company must have additional permits from the Minister of Economy and
appropriate sanitary authorities to operate its wholesale distribution business.
Furthermore, it must comply with rules of general applicability with regard to
packaging, labeling and transporting products.

GENERAL PERMITS

The Company is required to have permits for the wholesale trade of each of
its three product lines. The permit with regard to beer is issued for two years
and the current permit expires on March 28, 2003. The permit with regard to
spirits is issued for one year and the current permit expires on December 31,
2001. The permit for wine is issued for two years and the current permit expires
on March 28, 2003. One of the conditions of these permits is that the Company
sells its products only to those who have appropriate permits to resell the
products. A permit can be revoked or not renewed if the Company fails to observe
laws applicable to its business as an alcohol wholesaler, fails to follow the
requirements of a permit or if it introduces into the Polish market alcohol
products that have not been approved for trade. The Company must also obtain
separate permits for each of its warehouses.

SANITARY REQUIREMENTS

The Company must obtain the approval of the local sanitary authorities to
open and operate its warehouses. This approval is the basis for obtaining the
permit for wholesale activities. The sanitary authorities are primarily
concerned with sanitation and proper storage of alcoholic beverages, as well as
cigars. These authorities can monitor the Company's compliance with health
regulations. Similar regulations apply to the transport of alcoholic beverages
and cigars, and the drivers of such transports must themselves submit health
records to appropriate authorities.

GENERAL NORMS

The Company must comply with a set of rules, usually referred to generally
as "Polish Norms," which constitute legal regulations concerning, as applicable
to the Company, standards according to which alcoholic beverages and cigars are
packaged, stored, labeled and transported. These norms are established by the
Polish Normalization Committee composed of specialists. In case of alcoholic
beverages, the committee is composed of academics working with relevant
government ministries and agencies as well as experienced businessmen working in
the alcoholic beverage industry. The Company received a certificate after an
inspection by the Central Standardization Institute, which is a separate central
administration authority, examining the quality of products and indicating its
compliance with applicable norms as of the date thereof. Such certification also
is needed to import alcoholic beverages. Compliance with these norms also is
confirmed by sanitary authorities when particular shipments of alcoholic
beverages arrive in Poland. See "--Import of Products--Approval of Sanitary
Authorities."

CUSTOMS WAREHOUSE

Since the Company operates a customs warehouse, further regulations apply,
and a permit of the President of the Main Customs Office and the approval of
sanitary authorities are required to open and operate such a warehouse. The
applicable sanitary concerns are the same as those discussed under "--Wholesale
Activities" with regard to non-custom warehouses. The Company received its most
current permit on December 28, 1998 from the President of the Main Customs
Office, which is for an unspecified period of time. The continued effectiveness
of the permit is conditioned on the Company's complying with the requirements of
the permit which are, in general, the proper payment of customs duties and
maintenance of an insurance policy.

CUSTOMS DUTIES AND QUOTAS

As a general rule, the import of alcoholic beverages and cigars into Poland
is subject to customs duties and the rates of the duties are set by the Polish
government acting through the Council of Ministers for particular types of
products. In the Company's case, the duties vary by its products lines.

.
Customs quotas for alcoholic beverages as well as for cigars are fixed
annually, with the current quotas being applicable through December 31, 2000.
There are no public guidelines on how the Minister of Economy has determined the
current quotas or may determine future quotas. If such quotas were substantially
reduced or eliminated, it would likely have an adverse impact on the Company's
business since the retail price of some of its imported alcohol products would
increase.

To import alcoholic beverages and cigars under the quotas, the Company must
receive a permit which is generally valid for three months and specifies what
products and what quality thereof may be imported from what country or group of
companies. It is the Company's practice to apply for this import permit after
concluding a contract for the import of a particular group of products. The
Company has always received the import permits for which it has applied,
although there can be no assurance that it will continue to do so in the future.

PRICE AND MARGIN CONTROLS

In general, Polish law does not affect either the prices charged or the
margins earned by the Company on its imported liquor products. Provisions of the
tax law provide for a general ban on importing products at "dumping prices,"
generally defined as being at prices lower than for similar products in the
country of origin. Fines could be imposed for such activity. Also, the Treasury
Office, which is the tax authority, may order a reduction in the price of a
product it determines to be "blatantly high." This standard is deemed met if (a)
the price of a product exceeds the price of the same alcoholic beverage in
another local jurisdiction by more than 25% or of a similar alcoholic beverage
by 40% or (b) the price quoted by the seller is higher than 10% of the price
quoted to the same purchaser by another seller and the former seller cannot
justify the higher price.

ADVERTISING BAN

Pursuant to the Alcohol Awareness Law of October 26, 1982, as amended,
there is an absolute ban on direct and indirect advertising of alcoholic
beverages in Poland. The definition of "alcoholic beverage" under such law
encompasses all the Company's alcoholic products. Promotions at the point of
sale and game contests are often used to limit the law's impact. The agency
charged with enforcing this law has successfully brought numerous cases in the
past few years alleging indirect advertising in the media. The Company has not
been involved in any such proceedings and seeks to comply fully with this law.

REGULATION OF RETAIL SALES

As part of the Company's business strategy, it plans to operate retail
outlets for alcoholic beverages. Polish law will require each such outlet to
have a retail permit to sell the brands expected to be offered to the public.
Typically, such permits are valid for two years and are renewable. The local
health authorities must also approve the sale of alcoholic beverages for each
location. The retail permit for the Company's initial retail outlet in Warsaw is
valid from February 25, 1998 through February 24, 2000 and has been extend till
February 24, 2002. After that date the agreement was renewed without any
specific period of time.

RISK FACTORS

LIMITED MANAGEMENT RESOURCES; DEPENDENCE ON KEY PERSONS

During the past two years the Company has proactively sought to expand its
management team. With the appointments of Mr. Evangelos Evangelou (1999) as
Chief Operating Officer and Mr. Neil Crook (2000) as Chief Financial Officer the
Company believes its has reduced its exposure to any one individual. In addition
the acquisitions of both MTC and PHA have brought with them the experienced
managers of these successful companies. As with most companies, the Company's
future success depends in part on the continued service of its senior management
team. Mr. Carey has entered into a three-year employment agreement with the
Company, which commenced on July 31, 1998. Mr. Carey has expressed his wish to
extend his contract beyond July 31, 2001 and this is expected to be confirmed by
the Board at their next annual meeting on May 1, 2001. Mr. Peterson's two year
agreement which expired on July 31, 2000 was renewed for an additional year. All
other members of the management team have three year employment contracts with
non competition clauses.

The management of future growth will require, among other things, continued
development of the Company's financial and management controls and management
information systems, stringent control of costs, increased marketing activities,
ability to attract and retain qualified management personnel and the training of
new personnel. The Company continues to seek additional personnel in order to
manage its growth and expansion. Failure to successfully

hire needed personnel and to manage its growth and development would have a
material adverse effect on the Company's business, results of operations and
financial condition.

NON-EXCLUSIVE, SHORT-TERM SUPPLY CONTRACTS

The Company has exclusive rights to distribute in Poland certain alcoholic
beverages which during 1998, 1999 and 2000 constituted approximately $10.4
million, $13.5 million and $23.6 million, respectively, or 19%, 15%, and 18%
respectively, of its net sales. The Company distributes the remainder of the
alcoholic beverages in its portfolio on a nonexclusive basis, though because of
its market share it enjoys a competitive advantage with regard to the
distribution of these beverages, which are available to the Company's
competitors. Furthermore, most of the Company's distribution agreements have a
term of approximately one year, although many are automatically renewed unless
one party gives notice of termination. Several of such agreements however, can
be terminated by one party without cause on relatively short notice. For
example, the distribution agreements with respect to domestic vodka (which
accounted for approximately 54%, 80% and 69% of the Company's net sales in 1998,
1999 and 2000, respectively) can be terminated on one month's notice. The
agreements with units of Diageo plc, which was formed in part in 1998 from the
combination of affiliates of the Company's suppliers United Distiller and
International Drinks and Vintners, can be terminated on 90 days prior written
notice and constituted, on a combined basis, 15%, 10% and 4% of the Company's
net sales in 1998, 1999 and 2000, respectively. The termination of such
agreements could have a material adverse effect on the business and operations
of the Company.

RISKS RELATED TO GROWTH THROUGH ACQUISITIONS

The Company's growth will depend in large part on its ability to acquire
additional distributors, increase product offerings, manage expansion, control
costs in its operations and consolidate effectively any acquisition into its
existing operations and systems of management and financial controls. Unforeseen
capital and operating expenses, or other difficulties, complications and delays
frequently encountered in connection with the expansion and integration of
acquired operations could inhibit the Company's growth. The full benefits of a
significant acquisition will require the integration of operational,
administrative, finance, sales and marketing organizations, as well as the
coordination of common sales and marketing efforts and the implementation of
appropriate operational, financial and management systems and controls. This
effort will require substantial attention from the Company's senior management
team. The diversion of management attention required by an acquisition could
have an adverse effect on the net sales and operating results of the Company.
There can be no assurance that the Company will identify suitable acquisition
candidates, that acquisitions will be consummated on acceptable terms or that
the Company will be able to successfully integrate the operations of any
acquisition. In addition, there can be no assurance that any acquired businesses
will be profitable at the time of their acquisition or will achieve or maintain
profitability levels that justify the investment therein, or that the Company
will be able to realize operating and economic efficiencies following such
acquisitions.

The Company's ability to grow through the acquisition of additional
companies will also be dependent upon the availability of capital to complete
such acquisitions. The Company intends to finance acquisitions through a
combination of its' available cash resources, bank borrowings and, in
appropriate circumstances, the further issuance of equity and/or debt
securities. All of the acquisitions so far have been paid for by a combination
of cash, funded by bank debt and with new share issues. It is the interest
charges on these acquisition loans, which have been the primary reason behind
the increase of the interest expense. Acquiring additional companies will an
effect and could cause fluctuations in the Company's financial position, and
could cause fluctuations in the Company's quarterly and yearly operating
results. Also, acquisitions result in the recording of goodwill and intangible
assets on the Company's financial statements, the amortization of which may
reduce reported earnings in subsequent years. The Company's current policy is to
amortize trademarks over 10 years and goodwill over 20 years in accordance to US
GAAP.

Under the Polish Anti-Monopoly Act, acquisitions may be blocked or have
conditions imposed upon them by the Polish Office for Protection of Competition
and Consumers (the "Anti-Monopoly Office") if the Anti-Monopoly Office
determines that the acquisition has a negative impact on the competitiveness of
the Polish market.

DEPENDENCE ON PRINCIPAL SUPPLIERS

In 2000 the Company had sales of over 5% of its net sales with the
following companies; Polmos Bialystok (23.3%), Bols (12.3%), Polmos Poznan
(11.7%), Polmos Zielona Gora (8.8%) and Belvedere (5.0%). The Company

has 1 year supply contracts with each of the named companies. The termination of
the Company's relationship with any of these entities could have a material
adverse effect on the business and operations of the Company.

FLUCTUATIONS IN QUARTERLY OPERATING RESULTS

The Company has experienced, and expects to continue to experience,
significant fluctuations in its quarterly operating results. The Company's
future operating results are dependent upon a number of factors including, but
not limited to, the demand for its products, the timing of its sales, the length
of its sales cycle and the timing and development of any competing businesses or
products and legislation.

REGULATION OF THE COMPANY'S BUSINESS

The importation and distribution of alcoholic beverages in Poland are
subject to extensive regulation, requiring the Company to receive and renew
various permits and licenses to import, warehouse, transport and sell alcoholic
beverages. These permits and licenses often contain conditions with which the
Company must comply in order to maintain the validity of such permits and
licenses. The Company believes it is operating with all the licenses and permits
material to its business, and the Company is not subject to any proceeding
calling into question its operations in compliance with any licensing and permit
requirements. The import and sale of cigars by the Company is also subject to
regulation.

There can be no assurance that the various governmental regulations
applicable to the alcoholic beverage industry will not be changed so as to
impose more stringent requirements on the Company. If the Company were to fail
to be in compliance with applicable governmental regulations or the conditions
of the licenses and permits it receives, such failure could cause the Company's
licenses and permits to be revoked and have a material adverse effect of the
Company's business, results of operations and financial condition. Further, the
applicable Polish governmental authorities, in particular the Minister of
Economy, have articulated only general standards for issuance, renewal and
termination of the licenses and permits which the Company needs to operate and,
therefore, such governmental authorities retain considerable discretionary
authority in making such decisions.

POSSIBILITY OF INCREASED GOVERNMENTAL REGULATION

The alcoholic beverage industry has become the subject of considerable
societal and political attention generally in recent years due to increasing
public concern over alcohol-related societal problems, including driving while
intoxicated, underage drinking and health consequences from the abuse of
alcohol. As an outgrowth of these concerns, the possibility exists for further
regulation of the alcoholic beverage industry in Poland. If alcohol consumption
in general were to come into disfavor among consumers in Poland, the Company's
business operations could be materially adversely affected. Since the Company
expects to sell cigars at its retail stores, it will also be subject to public
concern and governmental regulation over the sale and use of tobacco products.

POSSIBLE INCREASE IN GOVERNMENTAL TAXATION

The import and sale of alcoholic beverages is a business that is highly
regulated and subject to taxation in Poland. The Company's operations may be
subject to increased taxation as compared with those of non-alcohol related
businesses. In such case, the Company may have to raise prices on its products
to maintain its profit margins. The effect on the Company's business operations
of such an increase will depend on the amount of any such increase, general
economic conditions and other factors, but could negatively impact sales of the
products the Company distributes. The anticipated import and sale of cigars by
the Company will also be subject to regulation and taxation.

CUSTOMS DUTIES AND QUOTAS

As a general rule, the import of alcoholic beverages into Poland is subject
to customs duties and the rates of the duties are set for particular types of
products. The Minister of Economy is authorized to establish a schedule of
quotas for alcoholic beverages for which the customs duties are substantially
reduced. Customs quotas for alcoholic beverages are fixed annually, with the
current quotas being applicable through December 31, 2000. There are no public
guidelines

on how the Minister of Economy has determined the current quotas or may
determine future quotas. If such quotas were substantially reduced or
eliminated, it would likely have an adverse impact on the Company's business
operations since the retail price of its imported alcoholic beverages would
likely increase.

COMPETITION LAW

Competition in Poland is governed by the Anti-Monopoly Act which,
established the Anti-Monopoly Office to regulate monopolistic and other
anti-competitive practices. The current body of Polish anti-monopoly law is not
well-established. As a general rule, companies that obtain control of 40% or
more of their market may face greater scrutiny from the Anti-Monopoly Office
than those that control a lesser share. Additionally, several types of
reorganizations, mergers and acquisitions and undertakings between business
entities, including acquisitions of stock, under circumstances specified in the
Anti-Monopoly Act, require prior notification to the Anti-Monopoly Office.
Sanctions for failure to notify include fines imposed on parties to the
transaction and members of their governing bodies. Pursuant to the current
interpretation of the Anti-Monopoly Office, transactions between non-Polish
parties affecting market conditions in Poland may also require a notification to
the Anti-Monopoly Office. The Law on Public Trading in Securities, which came
into force on January 4, 1998, provides for an amendment to the Anti-Monopoly
Act to repeal the exemption from notification of transactions made on a stock
exchange, but such law does not stipulate whether this is applicable to stock
exchanges outside Poland or only those within Poland. There can be no assurance
that the Anti-Monopoly Office will approve any or all future acquisition by the
Company. However with CEDC having current 11% of market share, this is seen of
little risk.

POLITICAL AND ECONOMIC ENVIRONMENT; ENFORCEMENT OF FOREIGN JUDGMENTS

Poland has undergone significant political and economic change since 1989.
Political, economic, social and other developments in Poland could in the future
have a material adverse effect on the Company's business and operations. In
particular, changes in laws or regulations (or in the interpretations of
existing laws or regulations), whether caused by changes in the government of
Poland or otherwise, could materially adversely affect the Company's business
and operations. Currently there are no limitations on the repatriation of
profits from Poland, but there can be no assurance that foreign exchange control
restrictions, taxes or limitations will not be imposed or increased in the
future with regard to repatriation of earnings and investments from Poland. If
such exchange control restrictions, taxes or limitations are imposed, the
ability of CEDC to receive dividends or other payments from Carey Agri could be
reduced, which may have a material adverse effect on the Company.

Poland is generally considered by international investors to be an emerging
market. There can be no assurance that political, economic, social and other
developments in other emerging markets will not have an adverse effect on the
market value and liquidity of the Common Stock. In general, investing in the
securities of issuers with substantial operations in markets such as Poland
involves a higher degree of risk than investing in the securities of issuers
with substantial operations in the United States and other similar
jurisdictions.

CEDC is organized under the laws of the State of Delaware. Company
stockholders are able to effect service of process in the United States upon
CEDC and may be able to effect service of process upon its directors, due to the
fact that CEDC is primarily a holding company which holds all of the outstanding
securities of Carey Agri, substantially all of the assets of the Company are
located outside the United States. As a result, it may not be possible for
investors to enforce against the Company's assets judgments of United States
courts predicated upon the civil liability provisions of United States laws.
CEDC has been advised by its counsel that there is doubt as to the
enforceability in Poland, in original actions or in actions for enforcement of
judgments of U.S. courts, of civil liabilities predicated solely upon the laws
of the United States. In addition, awards of punitive damages in actions brought
in the United States or elsewhere may not be enforceable in Poland.

INFLATION; CURRENCY RISK

2000. Inflation and currency exchange fluctuations have had, and may continue to
have, an adverse effect on the financial condition and results of operations of
the Company.

Certain of the Company's operating expenses and capital expenditures are,
and are expected to continue to be, denominated in or indexed to U.S. Dollars or
other hard currencies. By contrast, substantially all of the Company's revenue
is denominated in zloty. Any devaluation of the zloty against the U.S. Dollar
that the Company is unable to offset through price adjustments will require the
Company to use a larger portion of its revenue to service its U.S.
Dollar-denominated obligations. While the Company may consider entering into
transactions to hedge the risk of exchange rate fluctuations, it is unlikely
that the Company will be able to obtain hedging arrangements on commercially
satisfactory terms. Accordingly, shifts in currency exchange rates may have an
adverse effect on the ability of the Company to service its U.S. Dollar
denominated obligations and, thus, on the Company's financial condition and
results of operations. See Note 11 to the consolidated financial statement.

EXCHANGE RATE

The following table sets forth, for the periods indicated, the noon
exchange rate (expressed in current zloty) quoted by the National Bank of
Poland. Such rates are set forth as zloty per U.S. Dollar. At March 22, 2001,
such rate was PLN 4.12 = $1.00.

YEAR ENDED DECEMBER 31,
----------------------------
1997 1998 1999 2000
---- ---------------------
Exchange rate at end of period . . . . . . . 3.53 3.50 4.15 4.14
Average exchange rate during period (1). . . 3.28 3.50 3.97 4.15
Highest exchange rate during period . . . . 3.56 3.81 4.35 4.60
Lowest exchange rate during period. . . . . 2.86 3.41 3.41 4.07
----------
(1) The average of the exchange rates on the last day of each month during
the applicable period.

ITEM 2. PROPERTIES

CUSTOMS AND CONSOLIDATION WAREHOUSE

The Customs and Consolidation Warehouse is a 9750 square meter leased
facility located in Warsaw. The lease is long term and the monthly rental,
denominated in U.S Dollar, was approximately $82,875 per month as of December
31, 2000.

SALES OFFICES AND WAREHOUSES

The Company also has entered into leases for its Warsaw headquarters and
each of its seven regional sales offices and warehouses. The amount of office
and warehouse space leased varies between 536 square meters in Gdynia up to
1,090 square meters in Krakow. The monthly lease payments, which are denominated
in Polish currency, vary between approximately $2,000 and $11,670 in the
regional offices to $ 36,000 per month in Warsaw. The Warsaw lease is of five
year duration without termination; five of the other leases can be terminated by
either party on three months prior notice; one can be terminated by either party
on two months prior notice.

Office and warehouses areas are leased in Bialystok for MTC operations. Monthly
rent is approximately $22,000. The rental increase is indexed every year using
inflation ratio calculated by the Polish Government. The lease expiration date
is March 12, 2002, at which time the lease may be re-negotiated.

RETAIL OUTLET

The Company has entered into a lease dated August 21, 1997 for its Warsaw
retail outlet. The lease is for an indefinite term and can be terminated by
either party on three months prior notice. The lessor, however, has waived its

right to terminate the agreement for three years as long as the lessee is
performing its obligations thereunder. Lease payments are currently $2,200 per
month. The Company leased its Krakow outlet in November 1999 and pays
approximately $1,500 on monthly basis. The Company leases its outlet in
Knostancin and pays a monthly rental of $1,000.

ITEM 3. LEGAL PROCEEDINGS

The Company is involved in litigation from time to time in the ordinary
course of business. In management's opinion, such litigation, individually and
in the aggregate, is not material to the Company's financial condition or
results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the
fourth quarter of the fiscal year ended December 31, 2000.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS

MARKET INFORMATION

The Company's common stock, $0.01 per share ("Common Stock") has been
traded on the Nasdaq National Market (the "National Market") under the symbol
"CEDC" since June 1999. Prior thereto it traded on the Nasdaq SmallCap Market
since its initial public offering in July 1998. Before such time, there was no
established public trading market for the Common Stock. The following table sets
forth the high and low sales prices for the Common Stock, as reported on the
Smallcap and National Markets for each of the Company's fiscal quarters since
trading commenced through December 31, 1999.

High Low
Quarter Ended 3/30/00 6.50 4.75
Quarter Ended 6/30/00 5.50 3.563
Quarter Ended 9/30/00 5.25 3.50
Quarter Ended 12/31/00 3.875 1.063

On March 20, 2001, the last reported sales price of the Common Stock was
$3.00 per share.

HOLDERS

As of March 5, 2001 there were 542 record holders of the Common Stock.

DIVIDENDS

Neither CEDC nor Carey Agri has ever declared or paid any dividends on its
capital stock. Neither company anticipates paying dividends in the foreseeable
future. Future dividends, if any, will be subject to CEDC's board of directors
and will depend upon, among other things, the results of CEDC's operations,
CEDC's capital requirements, surplus, general financial condition and
contractual restrictions and such other factors as the board of directors may
deem relevant.

In addition, CEDC is a holding company with no business operations of its
own. Therefore, the ability of CEDC to pay dividends will be dependent upon
either cash flows and earnings of its subsidiaries or the payment of funds by
those subsidiaries to CEDC. As a Polish limited liability companies, the
subsidiaries are permitted to declare dividends only once a year from its
retained earnings, computed under Polish Accounting Regulations after the
audited financial statements for that year have been provided to and approved by
shareholders and filed with a court.

At December 31, 2000, approximately $4.4 million in retained earnings of
the Polish subsidiaries were undistributed. It is the Company's current policy
that such funds will be reinvested in Poland and will, accordingly, not be
currently available to pay dividends to CEDC. Consequently at such date, no
earnings were available to pay dividends to CEDC. See Note 9 to the Notes to
Consolidated Financial Statements contained in Item 8 of the report on Form
10-K.

ITEM 6. SELECTED FINANCIAL DATA

The following table sets forth selected consolidated financial data for the
periods indicated and should be read in conjunction with and is qualified by
reference to "Management's Discussion and Analysis of Financial Condition and
Results of Operations," the consolidated financial statements, the notes thereto
and the other financial data contained in Items 7 and 8 of this report on Form
10-K.

YEAR ENDED DECEMBER 31,
INCOME STATEMENT DATA: -------------------------------------------------------------
1996 1997 1998 1999 2000
--------- --------- --------- --------- ---------
(in thousands, except for per share amounts)

Net sales ........................................................ $ 23,942 $ 40,189 $ 54,011 $ 90,240 $ 131,233
Cost of goods sold ............................................... 19,850 34,859 45,864 77,471 113,687
--------- --------- --------- --------- ---------

Gross profit ..................................................... 4,092 5,330 8,147 12,769 17,546
Sales, general and administrative
expenses .................................................... 3,569 4,198 5,790 9,537 14,698
--------- --------- --------- --------- ---------

Operating income ................................................. 523 1,132 2,357 3,232 2,848
Non-Operating income (expense)
Interest expense ............................................. (124) (200) (192) (374) (955)
Interest income .............................................. -- 28 170 378 261
Realized and unrealized foreign currency
transaction losses, net .................................... (232) (326) (5) (215) (494)
Other income (expense), net .................................. 6 15 1 (13) (172)
--------- --------- --------- --------- ---------

Income before income taxes ....................................... 173 649 2,329 3,008 1,488
Income (taxes) ................................................... (111) (341) (861) (1,106) (503)
--------- --------- --------- --------- ---------

Net income ....................................................... $ 62 $ 308 $ 1,468 $ 1,902 $ 985
========= ========= ========= ========= =========
Net income (loss) per common share,
basic and dilutive (1) ..................................... $ 0.03 $ 0.17 $ 0.56 $ 0.47 $ 0.23
========= ========= ========= ========= =========
Average number of outstanding shares of
common stock (1) ........................................... 1,780 1,780 2,635 4,050 4,334

DECEMBER 31,
BALANCE SHEET DATA: -------------------------------------------------------------
1996 1997 1998 1999 2000
--------- --------- --------- --------- ---------
(in thousands)

Cash and cash equivalents......................................... $ 740 $ 1,053 $ 3,628 $ 3,115 $ 2,428
Working capital (deficit) ........................................ (117) (508) 10,922 9,717 9,362
Total assets ..................................................... 7,335 12,530 21,926 38,966 59,311
Long-term debt and capital lease obligations,
less current portion ......................................... 303 47 -- 3,622 7,988

Stockholders' equity ............................................. 26 334 12,327 14,613 16,492

(1) Gives effect to the 1,780,000 shares of Common Stock issued in the
reorganization and 2,000,000 shares issued in the July 1998 initial public
offering.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION

The following analysis should be read in conjunction with the Consolidated
Financial Statements and the notes thereto appearing elsewhere in this report.

OVERVIEW

The Company's operating results are generally determined by the volume
of alcoholic beverages that can be sold by the Company through its national
distribution system, the gross profits on such sales and control of costs. The
Company purchases the alcoholic beverages it distributes from producers as well
as other importers and wholesalers. Normally purchases are made with the sellers
providing a period of time, generally between 25 and 90 days, before the
purchase price is to be paid by the Company. Since the Company's initial public
offering in July 1998, however, the Company pays for a significant portion of
its domestic vodka purchases using cash on delivery terms in order to receive
additional discounts. The Company sells the alcoholic beverages with a mark-up
over its purchase price, which mark up reflects the market price for such
individual product brands in the Polish market. Additional margins are available
for premium imported brands.

The following comments regarding variations in operating results should
be read considering the rates of inflation in Poland during the period -- 1998,
8.5% 1999, 9.8% and 2000, 8.5%-- as well as the fluctuations of the Polish zloty
compared to the U.S. Dollar. The zloty in comparison to the U.S. Dollar
depreciated 18.6% in 1999 and appreciated 0.1% in 2000.

RESULTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED DECEMBER 31, 1999

Net sales increased $41.0 million, or 45.0% from $90.2 million in 1999
to $131.2 million in 2000. This increase is mainly due to increased sales of
domestic vodka due to the acquisition of PHA and increased market penetration by
the existing distribution system and the acquisition of MTC and PWW.

Cost of goods sold increased $36.2 million, or 46.7%, from $77.5
million in 1999 to $113.7 million in 2000. As a percentage of net sales, cost of
goods sold increased from 85.8% to 86.6%. This increase is mainly due to the
dilutive effect of the PHA acquisition and the subsequent increase in the share
of domestic vodka of the groups portfolio. Domestic vodka tends to achieve a
lower gross margin than imported alcohol products.

Core sales, general and administrative expenses increased $4.3 million
or 48.6% from $8.8 million in 1999 to $13.1 million in 2000. As a percentage of
sales core selling costs increased from 9.7% in 1999 to 10.0% in 2000. As an
absolute value this increase is mainly due to the additional costs consolidated
resulting from the acquisition of PHA and as a percentage the increase was
because of one time integration costs. Goodwill and trademark amortization
increased from $0.4 million in 1999 to $0.7 million in 2000, an increase of 87%.
Provisions for bad and doubtful debts increased from $0.3 million in 1999 to
$0.5 million in 2000. As a percentage of net sales the provision increased from
0.28% in 1999 to 0.39% in 2000. This increase is the result of a change in
policy intended to bring a more conservative estimation of provision
requirements. Depreciation of tangible fixed assets increased from $0.1 million
in 1999 to $0.4 million in 2000 an increase of 226%.

Interest expense increased $0.6 million or 155% from $0.4 million in
1999 to $1.0 million in 2000. This increase is mainly due to additional
borrowing required to financing the acquisitions for supporting the higher sales
volume. As a percentage of net sales, interest expense was 0.4% in 1999 and 0.7%
in 2000.

In 2000, interest income was $0.4 million compared to $0.3 million in
1999.

Net realized and unrealized foreign currency transactions resulted in
losses of $0.2 million in 1999 and $0.5

million in 2000. In addition, the Company no longer considered Poland to be a
hyperinflationary country since January 1, 1998 and made the Polish zloty the
functional currency for Carey Agri's operations. Therefore, translation losses
are now accounted for in equity, in the determination of comprehensive income,
rather than in the income statement. Such translation losses were $1.9 million
in 1999 and $2.2 million in 2000. See Note 11 to the consolidated financial
statements.

Income tax expense decreased $0.6 million from $1.1 million in 1999 to
$0.5 million in 2000. This decrease is mainly due to the decrease in income
before income taxes from $3.0 million in 1999 to $1.5 million in 2000.

The effective tax rate decreased from 36.8% in 1999 to 33.8% in 2000.
Permanent differences (for items such as non-deductible interest, taxes, and
depreciation) between financial and taxable income normally make up a
considerably lower percentage of income before income taxes when income before
income taxes is higher, as it was in 1998. For this reason, as well as the
decrease in the statutory tax rate in Poland from 32% in 1999 to 30% in 2000,
the effective tax rate was slightly higher in 2000. The Company believes its US
deferred tax asset of $81,000 will be recovered by virtue of interest and other
income received from loans and other services provided to its subsidiaries.
Carey Agri's Polish deferred tax asset of $473,000 should be recovered from
future operating profits. See Note 12 to the consolidated financial statements
for further information on income taxes.

Net income decreased $0.9 million from $1.9 million in 1999 to $1.0
million in 2000. This decrease is due to the factors noted above.

YEAR ENDED DECEMBER 31, 1999 COMPARED TO YEAR ENDED DECEMBER 31, 1998

Net sales increased $36.2 million, or 67.1% from $54.0 million in 1998
to $90.2 million in 1999. This increase is mainly due to increased sales of
domestic vodka and increased market penetration by the existing distribution
system.

Cost of goods sold increased $31.6 million, or 68.9%, from $45.9
million in 1998 to $77.5 million in 1999. As a percentage of net sales, cost of
goods sold increased from 84.9% to 85.8%. This increase is mainly due to the
product mix dilution following the acquisition of MTC.

Core sales, general and administrative expenses increased $3.3 million
or 60.0% from $5.5 million in 1998 to $8.8 million in 1999. This increase is
mainly due to the expansion of sales noted above and the new expenses arising
from the acquisitions of MTC and PWW. As a percentage of net sales, core sales,
general and administrative expenses decreased slightly from 10.1% to 9.7%.
Depreciation of tangible fixed assets decreased from $0.2 million in 1998 to
$0.1 million in 2000. Provision for bad or doubtful debts increased from $0.1
million to $0.3 million as a percentage of net sales provisions are 0.17% and
0.28% for 1998 and 1999 respectively.

Interest expense increased $182,000 or 94.8% from $192,000 in 1998 to
$374,000 in 1999. This increase is mainly due to additional borrowing required
for financing the initial public offering expenses and for supporting the higher
sales volume in the first half of the year. In the second half of the year all
outstanding debt was retired using the proceeds from the initial public
offering. As a percentage of net sales, interest expense was 0.4% for both 1998
and 1999.

Interest income increased $208,000 or 122% from $170,000 in 1998 to
$378,000 in 1999.

Net realized and unrealized foreign currency transactions resulted in
losses of $5,000 in 1998 and $215,000 in 1999. The increase was due to a 18.6%
devaluation of the Polish zloty in 1999 compared to an increase of 0.3% in 1998.
In addition, the Company no longer considered Poland to be a hyperinflationary
country since January 1, 1998 and made the Polish zloty the functional currency
for Carey Agri's operations. Therefore, translation losses are now accounted for
in equity, in the determination of comprehensive income, rather than in the
income statement. Such translation losses were $110,000 in 1998 and $1.9 million
in 1999.

Income tax expense increased $140,000, from $861,000 in 1998 to $1
million in 1999. This increase is mainly due to the increase in income before
income taxes from $2.3 million to $3.0 million.

The effective tax rate decreased from 37.0% in 1998 to 33.2% in 1999.
Permanent differences (for items such

as non-deductible interest, taxes, and depreciation) between financial and
taxable income normally make up a considerably lower percentage of income before
income taxes when income before income taxes is higher, as it was in 1998. For
this reason, as well as the decrease in the statutory tax rate in Poland from
34% in 1998 to 32% in 1999, the effective tax rate was significantly lower in
1999. The Company believes its US deferred tax asset of $62,000 will be
recovered by virtue of interest and other income received from loans and other
services provided to its subsidiaries. Carey Agri's Polish deferred tax asset of
$77,000 should be recovered from future operating profits. See notes to the
consolidated financial statements for further information on income taxes.

Net income increased $434,000 from $1,468,000 in 1998 to $1,902,000 in
1999. This increase is due to the factors noted above.

STATEMENT OF LIQUIDITY AND CAPITAL RESOURCES

The Company's net cash balance decreased by $0.7 million in 2000
compared to a decrease of $0.5 million in 1999. The decrease was a result of the
Company funding its working capital expansion from cash reserves as opposed to
additional funding. See consolidated cashflow statement for details.

Net cash used in operating activities improved by $2.2 million to a
negative $1.1 million compared in 2000 compared to a negative $3.3 million in
1999. The movement is due to the Company obtaining better payment terms from its
suppliers.

Investing activities amounted to $5.6 million in 2000 and are in most
part related to the acquisition of PHA as well as a substantial investment in
the new warehouse facility. During the 1999 period the investing activities
amounted to $5.7 million of which the largest part was the acquisition of MTC
and PWW with the balance being purchasing of delivery vehicles.

Net cash provided by financing activities in 2000 was $6.1 million from
EURO and U.S. dollar denominated loans. The net change of the overdraft facility
and short term borrowings was an increase of short term borrowings of $2.2
million and of long term by $5.7 million.

The amount of the Company's stockholder equity is directly affected by
foreign currency translation adjustments. For the year 2000 such adjustments
resulted in a comprehensive loss of $0.3 million and a decrease in stockholders
equity of a like amount.

STATEMENT ON INFLATION AND CURRENCY FLUCTUATIONS

Inflation in Poland was 8.5% for the whole of 2000, slightly lower than
the 9.8% in 1999.

The percentage of aggregated purchases denominated in foreign
currencies decreased in 2000 resulting in lower foreign exchange exposure.
However, the level of borrowing denominated in U.S. Dollar's and Euro's has
increased due to the funding of the acquisitions. In 2000, the zloty appreciated
0.3% versus the U.S.Dollar and appreciated 8.1% versus the Euro. Because of the
volatility of exchange rates during the year loans were taken at weaker rates
that those achieved at year end. The zlotys' recovery was achieved wholly in
December.

SEASONALITY

The Company's sales have been historically seasonable with over 30% of
the sales in 1999 occurring in the fourth quarter. During 2000 sales in the
fourth quarter increased to 37%. This increase was a result of the increases of
sales run rates across all companies within the group along with the benefit of
improved average exchange rates in the last quarter.

The Company's working capital requirements are also seasonal, and are
normally highest in the months of December and January. Liquidity then normally
improves as collections are made on the higher sales during the months of
November and December.

OTHER MATTERS

The Company continues to be involved in litigation from time to time in
the ordinary course of business. In management's opinion, the litigation in
which the Company is currently involved, individually and in the aggregate, is
not material to the Company's financial condition or results of operations.

In March 2000, the Company completed it acquisition of 100% of PHA Sp. z.
o.o. a distributor in the south west of Poland with a 1999 turnover of
approximately $43 million. The purchase price is approximately $5.3 million and
is a combination of cash and CEDC stock.

In March 2000, the Company contracted to either purchase or lease
14,750 meters (147,500 square feet) of modern high volume warehouse facility
along with 1,800 meters (18,000 square feet) of class `A' office accommodation.
This is to enable CEDC to increase performance both from improved productivity
of inventory handling and by attracting / retaining exclusive distribution
rights on more premium brands. The Company has opted to exercise the five year
lease non-cancelable contract.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

The Company's operations are conducted primarily in Poland and the
functional currency of Carey Agri, MTC CFW and PHA is the Polish zloty and the
reporting currency is the U.S. dollar. The Company's financial instrument
consist mainly of cash and cash equivalents, accounts receivable, accounts
payable, bank loans, overdraft facilities and long-term debt. Substantially all
of the monetary assets represented by these financial instruments are located in
Poland; consequently, they are subject to currency translation risk when
reporting in U.S. dollars. Accounts payable for imported beverages are billed in
various currencies and the Company is subject to short-term swings in the
currency markets for product purchases. However, trade payables are settled
relatively quickly so as to minimize this risk. Bank borrowings are sensitive to
interest and foreign currency market risks as they usually bear interest at
variable rates and are in more than one currency. The Company has not attempted
any serious hedging programs prior to the end of 1999. However, in year 2001 it
plans to increase management of its currency risk through the use of forward
contracts. There were no such contracts outstanding at either December 31, 1998,
1999 or 2000. The Company's sensitivity to interest rates and foreign currency
movements at December 31, 2000 is shown below for its bank financial
instruments:

YEAR OF MATURITY
2001 2002 TOTAL
(THOUSANDS OF USD)

Short term borrowings

Bank overdrafts payable in polish zloty (interest varies 1,383 1,383
With WIBOR which was 18.85% at December 31,2000)

Bank Loans payable in USD (interest varies with LIBOR) 4,702 5,045 9,747

Bank loan payable in Polish zloty (interest rate varies with 480 480
WIBOR)

Bank loans payable in EURO (interest varies with 698 2,463 3,161
EURLIBOR)

Exchange rates against U.S. Dollar at December 31, 2000

Polish zloty 4.1432
EURO 3.8544
Swiss Franc 2.5309

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS:

Report of Independent Auditors 26

Consolidated Balance Sheets at December 31, 1999 and 2000 27

Consolidated Statements of Income for the years ended December 31, 1998, 1999 and 2000 28

Consolidated Statements of Changes in Stockholders' Equity for the years ended 29
December 31, 1998, 1999 and 2000

Consolidated Statements of Cash Flows for the years ended December 31, 1998, 1999 and 2000 30
Notes to Consolidated Financial Statements 31-46

REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Stockholders
Central European Distribution Corporation

We have audited the accompanying consolidated balance sheets of Central European
Distribution Corporation as of December 31, 2000 and 1999 and the related
consolidated statements of income, changes in stockholders' equity, and cash
flows for each of the three years in the period ended December 31, 2000. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Central European
Distribution Corporation at December 31, 2000 and 1999, and the consolidated
results of its operations and its cash flows for each of the three years in the
period ended December 31, 2000 in conformity with accounting principles
generally accepted in the United States of America.

ERNST & YOUNG AUDIT Sp. z o.o.

Warsaw, Poland
March 25, 2001

CENTRAL EUROPEAN DISTRIBUTION CORPORATION

CONSOLIDATED BALANCE SHEETS
Amounts in columns expressed in thousands

DECEMBER 31,
---------------------
1999 2000
-------- --------
ASSETS

CURRENT ASSETS
Cash and cash equivalents $ 3,115 $ 2,428
Accounts receivable, net of allowance for doubtful accounts of
$343,000 and $1,230,000, respectively 17,299 30,983
Inventories 7,610 9,557
Prepaid expenses and other current assets 2,208 809
Deferred income taxes 107 416
-------- --------
TOTAL CURRENT ASSETS 30,339 44,193

Intangible assets, net 6,676 11,471
Equipment, net 1,618 3,031
Deferred income taxes 194 80
Other assets 139 536
-------- --------
TOTAL ASSETS $ 38,966 $ 59,311
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Trade accounts payable $ 14,629 $ 26,399
Bank loans and overdraft facilities 2,165 1,383
Income taxes payable 134 35
Taxes other than income taxes 481 928
Other accrued liabilities 557 686
Current portion of long-term debt 2,765 5,400
-------- --------
TOTAL CURRENT LIABILITIES 20,731 34,831

Long-term debt, less current maturities 3,622 7,988

Commitments and contingencies

STOCKHOLDERS' EQUITY
Preferred Stock ($0.01 par value, 1,000,000 shares authorized; no
shares issued and outstanding) -- --
Common Stock ($0.01 par value, 20,000,000 shares authorized,
4,134,230 and 4,402,356 shares issued at December
31, 1999 and 2000, respectively) 42 45
Additional paid-in-capital 12,900 14,175
Retained earnings 3,650 4,635
Accumulated other comprehensive loss (1,979) (2,243)
Less 64,100 shares in treasury at cost at December 31, 2000 -- (120)
-------- --------
TOTAL STOCKHOLDERS' EQUITY 14,613 16,492
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 38,966 $ 59,311
======== ========

See accompanying notes.

CENTRAL EUROPEAN DISTRIBUTION CORPORATION

CONSOLIDATED STATEMENTS OF INCOME
Amounts in columns expressed in thousands

YEAR ENDED DECEMBER 31,
-------------------------------------
1998 1999 2000
--------- --------- ---------

Net sales $ 54,011 $ 90,240 $ 131,233
Cost of goods sold 45,864 77,471 113,687
--------- --------- ---------

Gross profit 8,147 12,769 17,546
Sales general and administrative expenses 5,540 8,795 13,120
Bad debt expense 94 254 517
Depreciation of tangible fixed assets 156 120 366
Amortization of goodwill and trademark -- 368 695
--------- --------- ---------

Operating income 2,357 3,232 2,848
Non-operating income (expense)
Interest expense (192) (374) (955)
Interest income 170 378 261
Realized and unrealized foreign currency
transaction losses, net (5) (215) (494)
Other expense, net (1) (13) (172)
--------- --------- ---------

Income before income taxes 2,329 3,008 1,488
Income tax expense 861 1,106 503
--------- --------- ---------

Net income $ 1,468 $ 1,902 $ 985
--------- --------- ---------

Net income per common share, basic and dilutive $ 0.56 $ 0.47 $ 0.23
========= ========= =========

See accompanying notes.

CENTRAL EUROPEAN DISTRIBUTION CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Amounts in columns expressed in thousands

CAPITAL STOCK

ISSUED IN TREASURY
------------------------------------------------ ACCUMULATED
ADDITIONAL OTHER
NO. OF NO. OF PAID-IN- RETAINED COMPREHENSIVE
SHARES AMOUNT SHARES AMOUNT CAPITAL EARNINGS LOSS TOTAL
------ ----- ------ ------ ----------- ------ ------------- -------

Balance at
December 31, 1997 1,780 $18 - - $36 $280 - $334

Net income for 1998 - - - - - 1,468 - 1,468

Foreign currency
translation
adjustment - - - - (110) (110)
------ --- --- ----- ------- ------ ------- -------
Comprehensive
income for 1998 - - - 1,468 (110) 1,358

Common stock issued
in connection with
initial public
offering 2,000 20 10,615 - - 10,635
------ --- --- ----- ------- ------ ------- -------
Balance at December
31, 1998 3,780 $38 $10,651 $1,748 $(110) $12,327

Net income for 1999 - - - 1,902 - 1,902

Foreign currency
translation
adjustment - - - - (1,869) (1,869)
------ --- --- ----- ------- ------ ------- -------
Comprehensive income
for 1999 - - - 1,902 (1,869) 33

Common stock issued
in connection with
acquisitions 354 4 2,249 - - 2,253
------ --- --- ----- ------- ------ ------- -------
Balance at December
31, 1999 4,134 $42 $12,900 $3,650 $(1,979) $14,613

Net income for 2000 985 985
Foreign currency
translation adjustment
(264) (264)
------ --- --- ----- ------- ------ ------- -------
Comprehensive income
for 2000 985 (264) 721

Treasury shares
purchased 64 (120) (120)

Common stock issued
in connection with
acquisition 268 3 1,275 1,278
------ --- --- ----- ------- ------ ------- -------
Balance at
December 31, 2000 4,402 $45 64 $(120) $14,175 $4,635 $(2,243) $16,492
====== === === ===== ======= ====== ======= =======

See accompanying notes.

CENTRAL EUROPEAN DISTRIBUTION CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS
Amounts in columns expressed in thousands

YEAR ENDED DECEMBER 31,
----------------------------------
1998 1999 2000
-------- -------- --------

OPERATING ACTIVITIES
Net income $ 1,468 $ 1,902 $ 985
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 199 446 1,061
Deferred income tax benefit (28) (162) (195)
Bad debt provision 94 254 517
Changes in operating assets and liabilities:
Accounts receivable (4,638) (1,517) (14,571)
Inventories (1,557) (354) (1,947)
Prepayments and other current assets (188) (1,737) 1,002
Trade accounts payable (1,641) 864 11,770
Income and other taxes 453 (799) 348
Other accrued liabilities and other (86) (2,228) (115)
-------- -------- --------

Net Cash Used In Operating Activities (5,924) (3,331) (1,145)

INVESTING ACTIVITIES
Purchases of equipment (1,052) (1,113) (1,898)
Proceeds from the disposal of equipment 53 137 112
Purchases of marketable securities (7,842) -- --
Proceeds from sale of marketable securities 7,842 -- --
Acquisitions of subsidiaries (40) (4,758) (3,855)
-------- -------- --------

Net Cash Used In Investing Activities (1,039) (5,734) (5,641)

FINANCING ACTIVITIES
Borrowings on overdraft facility 24,575 8,120 1,167
Payment of overdraft facility (24,875) (7,949) (1,949)
Payment of capital lease obligations (113) -- --
Short-term borrowings 725 1,994 4,400
Payment of short-term borrowings (1,350) -- (1,765)
Long-term borrowings 139 6,387 8,280
Payment of long-term borrowings (422) -- (3,914)
Net proceeds from initial public offering 10,859 -- --
Purchase of treasury shares -- -- (120)
-------- -------- --------
Net Cash Provided By Financing Activities 9,538 8,552 6,099
-------- -------- --------
Net Increase (Decrease) in Cash 2,575 (513) (687)
Cash and cash equivalents at beginning of period 1,053 3,628 3,115

-------- -------- --------
Cash and cash equivalents at end of period $ 3,628 $ 3,115 $ 2,428
======== ======== ========

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING ACTIVITIES
Common stock issued in connection with
investment in subsidiaries (Note 10) $ -- $ 2,253 $ 1,278
======== ======== ========
Supplemental disclosures of cash flow information
Interest paid $ 192 $ 354 $ 865
Income tax paid $ 725 $ 1,313 $ 532

See accompanying notes.

CENTRAL EUROPEAN DISTRIBUTION CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Monetary amounts in columns expressed in thousands
(except per share information)

1. ORGANIZATION AND DESCRIPTION OF BUSINESS

Central European Distribution Corporation (CEDC) was organized as a Delaware
Corporation in September 1997 to operate as a holding company through its then
sole subsidiary, Carey Agri International Poland Sp. z o.o. (Carey Agri). CEDC,
Carey Agri and the other subsidiaries referred to later in this note are
referred to herein as the Company.

CEDC's authorized capital stock consists of 20.0 million shares of common stock,
$0.01 par value, and 1.0 million shares of preferred stock, $0.01 par value. No
shares of preferred stock have been issued and its terms and conditions will be
established by the Board of Directors at a later date.

In July 1998, CEDC had an initial public offering of 2,000,000 shares (at $6.50
per share) receiving net proceeds of approximately $10.6 million. The shares are
currently quoted on the Nasdaq National Market.

Carey Agri is a Polish limited liability company with headquarters in Warsaw,
Poland. Carey Agri distributes alcoholic beverages throughout Poland and all
activities are conducted within that country. It currently has branches in the
following Polish cities: Warsaw, Krakow, Szczecin, Gdynia, Wroclaw, Torun,
Katowice, Poznan, Zielona Gora, and Biaylstok.

In March 1999, the Company purchased a significant portion of the assets, of
Multi Trade Company S.C. (MTC). MTC is a distributor of alcoholic beverages
located in Biaylstok, Poland.

In May 1999, the Company purchased a significant portion of the assets, of the
Cellar of Fine Wines S.C. (CFW). CFW is an importer and a distributor of wines
located in Sulejowek near Warsaw, Poland.

In March 2000, the Company purchased 100% of the voting stock of Polskie
Hurtownie Alkoholi Sp. z o.o. (PHA). PHA is a distributor of alcoholic and
non-alcoholic beverages located in Zielona Gora, Poland.

Pursuant to Polish statutory requirements, Carey Agri, MTC, CFW and PHA may pay
annual dividends, based on their audited Polish financial statements, to the
extent of their retained earnings as defined. At December 31, 2000,
approximately $ 4,800,000 was available for payment of dividends.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies and practices followed by the Company are as
follows:

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Central European
Distribution Corporation and its subsidiaries. All inter-company accounts and
transactions have been eliminated in the consolidated financial statements.

CEDC's subsidiaries maintain their books of account and prepare their Statutory
financial statements in Polish zloties (PLN) in accordance with Polish statutory
requirements and the Accounting Act of 29 September 1994. Subsidiaries'
financial statements have been adjusted to reflect generally accepted accounting
principles in the United States of America ("US GAAP").

CENTRAL EUROPEAN DISTRIBUTION CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Monetary amounts in columns expressed in thousands
(except per share information)

FOREIGN CURRENCY TRANSLATION AND TRANSACTIONS

For all of the Company's subsidiaries the functional currency is the local
currency. Assets and liabilities of these operations are translated at the
exchange rate in effect at each year end. Income Statement accounts are
translated at the average rate of exchange prevailing during the year.
Translation adjustments arising from the use of differing exchange rates from
period to period are included as a component of shareholders' equity. Gains and
losses from foreign currency transactions are included in net income for the
period.

The exchange rate used on Polish zloty denominated transactions and balances for
translation purposes as of December 31, 1999 and 2000 for one US dollar was 4.15
PLN and 4.14 PLN respectively. As of March 25, 2001 the rate had changed to 4.13
PLN.

EQUIPMENT

Equipment is stated at cost, less accumulated depreciation. Depreciation is
computed by the straight-line method over the following useful lives:

TYPE DEPRECIATION LIFE IN YEARS
- ----------------------------------- --------------------------

Transportation Equipment 6
Beer Dispensing and Other Equipment 2-10

The Company periodically reviews equipment, when indicators of impairment exist
and if the value of the asset is impaired, an impairment loss is recognized.

INTANGIBLE ASSETS

Intangibles consist of acquired goodwill and trademarks. Goodwill and trademarks
are amortized on a straight-line basis over the periods that expected economic
benefits will be provided (20 years for goodwill and 10 years for trademarks).
The Company assesses the recoverability of its goodwill and trademarks whenever
adverse events or changes in circumstances or business climate indicate that
expected future cash flows (undiscounted and without interest charges) for
individual business units may not be sufficient to support the recorded
intangible assets. If undiscounted cash flows are not sufficient to support the
recorded assets, an impairment reserve would be recognized to reduce the
carrying value of the goodwill and trademarks based on the expected discounted
cash flows of the business unit. No such reserves have been considered necessary
through the date of the accompanying financial statements.

REVENUE RECOGNITION

Revenue is recognized when goods are shipped to customers.

ADVERTISING AND PROMOTION COSTS

Advertising and promotion costs are expensed as incurred. Advertising and
promotion costs not reimbursed by suppliers were approximately $660,000,
$359,000 and $278,000 in 1998, 1999 and 2000, respectively.

INVENTORIES

Inventories are stated at the lower of cost (first-in, first-out method) or
market. Cost includes customs duty and transportation costs. Inventories are
comprised primarily of beer, wine, spirits, and non-alcoholic beverages.

CENTRAL EUROPEAN DISTRIBUTION CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Monetary amounts in columns expressed in thousands
(except per share information)

CASH AND CASH EQUIVALENTS

Short-term investments that have a maturity of three months or less at the
date of purchase are classified as cash equivalents. Virtually all of this
amount was located in bank accounts in Poland at December 31, 2000.

ESTIMATES

The preparation of consolidated financial statements in conformity with US GAAP
requires management to make estimates and assumptions that affect the amounts
reported in the consolidated financial statements and accompanying notes. Actual
results may differ from those estimates and such differences may be material to
the consolidated financial statements.

INCOME TAXES

The Company computes and records income taxes in accordance with the liability
method.

EMPLOYEE STOCK-BASED COMPENSATION

As permitted by Statement of Financial Accounting Standard (SFAS) No. 123,
"Accounting for Stock-Based Compensation," the Company accounts for its employee
stock-based compensation in accordance with Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees." Accordingly, no employee
based compensation costs have been recognized for fixed stock options issued
under the Company's employee stock incentive plan. The Company discloses pro
forma net income and net income per share as if the fair value method of SFAS
No. 123 had been used (see Note 14).

COMPREHENSIVE INCOME

In June 1997, the Financial Accounting Standards Board (FASB) issued its
Statement No. 130, "Reporting Comprehensive Income." This standard requires the
disclosure of comprehensive income which is defined as all changes in equity
during a period except those resulting from investments by owners and
distributions to owners. Comprehensive income includes net income adjusted by,
among other items, foreign currency translation adjustments. The foreign
translation losses on the translation from Polish zloties to US dollars are
classified as a separate component of the shareholders' equity as "accumulated
other comprehensive loss".

During the period ended December 31, 2000, the Company incurred foreign currency
translation losses of $264,000 and reported this amount as part of the
accumulated comprehensive loss in shareholders' equity of $2,243,000. During
2000, the Polish zloty strengthened during the fourth quarter and as a result
reduced the amount of the currency translation loss as compared to the previous
year. Additionally translation losses

CENTRAL EUROPEAN DISTRIBUTION CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Monetary amounts in columns expressed in thousands
(except per share information)

with respect to long term inter-company transactions with the parent company are
charged to other comprehensive loss. No deferred tax benefit is recorded on the
accumulated comprehensive loss as it is CEDC current intention to reinvest
subsidiary earnings. The total of the accumulated other comprehensive loss
consist solely of currency translation adjustments.

SEGMENT REPORTING

The Company operates in one industry segment, the distribution of alcoholic and
non-alcoholic beverages. These activities are conducted by Carey Agri, MTC, CFW
and PHA in Poland. Substantially all revenues, operating profits and assets
relate to this business. CEDC assets (excluding inter-company loans and
investments) located in the United States of America represent approximately 1%
of consolidated assets

NET INCOME PER COMMON SHARE

Net income per common share is calculated in accordance with SFAS No. 128,
"Earnings per Share". Basic earnings per share (EPS) is computed by dividing net
income by the weighted-average number of common shares outstanding for the year.
The stock options and warrants discussed in Note 14 were not included in the
computation of diluted earnings per common share as the effect would be anti
dilutive.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENT

SFAS 133, "Accounting for Derivatives Instruments and Hedging Activities," as
amended by SFAS 138, establishes accounting and reporting standards for
derivative instruments and hedging activities. It requires the Company to
recognize all derivatives as either assets or liabilities in the balance sheet
and measure those instruments at fair value. It further provides criteria for
derivative instruments to be designated as fair value, cash flow or foreign
currency hedges, and establishes accounting standards for reporting changes in
the fair value of the derivative instruments. Upon adoption, the Company will be
required to adjust hedging gains or losses as adjustments to be reported to net
income or other comprehensive income as appropriate. The Company will adopt
SFAS No. 133 in fiscal 2001. Management does not believe the adoption of SFAS
No. 133 will have a material effect on the Company's results of operations or
financial position and the Company had no opening hedging contracts or
derivative financial instruments at the year end.

RECLASSIFICATIONS

Certain amounts in the financial statements have been reclassified from prior
years to conform to the current year presentation.

3. INTANGIBLE ASSETS

Intangibles, presented net of accumulated amortization in the consolidated
balance sheets, consist of:

DECEMBER 31,
---------------------
1999 2000
-------- --------

Goodwill $ 2,913 $ 8,403
Trademark 4,077 4,077
Other 71 71
-------- --------
7,061 12,551

Less accumulated amortization (385) (1,080)

-------- --------
Intangibles, net $ 6,676 $ 11,471
======== ========

4. EQUIPMENT

Equipment, presented net of accumulated depreciation in the consolidated balance
sheets, consists of:

DECEMBER 31,
-------------------
1999 2000
------- -------

Transportation equipment $ 1,541 $ 2,542
Beer dispensing and other equipment 701 1,479
------- -------
2,242 4,021

CENTRAL EUROPEAN DISTRIBUTION CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Monetary amounts in columns expressed in thousands
(except per share information)

Less accumulated depreciation (624) (990)

------- -------
Equipment, net $ 1,618 $ 3,031
======= =======

5. ALLOWANCE FOR DOUBTFUL ACCOUNTS

Changes in the allowance for doubtful accounts during each of the three years in
the period ended December 31, 2000 were as follows:

YEAR ENDED DECEMBER 31,
----------------------------
1998 1999 2000
------ ------ ------

Balance, beginning of year $ 94 $ 181 $ 343
Provision for bad debts 94 254 517
Charge-offs, net of recoveries (7) (92) --
Acquired, allowance for
bad debts from purchase of PHA -- -- 370
------ ------ ------
Balance, end of year $ 181 $ 343 $1,230
====== ====== ======

CENTRAL EUROPEAN DISTRIBUTION CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Monetary amounts in columns expressed in thousands
(except per share information)

6. LONG-TERM DEBT

Long-term debt consists of the following:

DECEMBER 31,
---------------------
1999 2000
-------- --------

Loan denominated in US Dollars $ 5,000 $ 9,747
Loan denominated in PLN 480
Loans denominated in EUR 1,387 3,161
Current portion of these loans (2,765) (5,400)
-------- --------
Long-term portion $ 3,622 $ 7,988
======== ========

On March 21, 2000, the Company signed a loan agreement for $700,000 to replace
two loans redeemed in March 2000. The interest rate is 3 month LIBOR plus 1.5%
(6.20% at December 31, 2000). $350,000 USD was redeemed during the first quarter
2001, the balance has been extended until March 2002.

In March 2000, the Company obtained a $4,000,000 USD denominated long-term loan.
The interest on this loan is at the three month USD LIBOR rate plus 1.4% (6.20%
at December 31, 2000); $500,000 is payable in June 2001, with another $500,000
payable every quarter thereafter. This loan is not collaterized.

In May 2000, the Company signed a loan agreement for $1,500,000 USD, the
interest rate is three months LIBOR plus 1.4%. The loan is repayable June 30,
2002

On May 16, 2000, the Company signed a loan agreement for $850,000. The annual
interest rate is 3 month LIBOR plus 1.5% (6.20% at December 31, 2000). The loan
is repayable in quarterly installments of $212,500 commencing August 20, 2001.

On July 21, 2000, the Company signed a loan agreement for $750,000. The annual
interest rate is 3 months LIBOR plus 1.5% (6.20% at December 31, 2000). The loan
is repayable on July 20, 2002.

In December 2000, the Company obtained a long-term loan for 2 million Polish
Zloty ($480,000 USD). The annual interest rate is approximately 19.0%. The loan
is repayable March 2002.

In April 1999, the Company obtained from the same bank an EUR denominated
long-term loan. The interest on this loan is at the three-month EUROLIBOR rate
plus 1.4% (4.48% at December 31,1999) The amount payable under the loan was
1,380,000 EUR (1,250,000USD) at December 31, 2000 and the loan is due in May
2001. This loan is collaterized by inventory up to a value of 3,500,000 PLN.

CENTRAL EUROPEAN DISTRIBUTION CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Monetary amounts in columns expressed in thousands
(except per share information)

During 1999, the Company acquired a long-term US Dollar loan from BRE Bank
amounting to $3,500,000. The loan agreement stipulated a principal payment of
$1,765,000 during 2000 with the balance payable in February 2001. The loan may
be repaid in USD with annual interest of LIBOR plus 1.85%, or in DEM with annual
interest of EURLIBOR plus 1.95% or in Swiss Francs with annual interest rate of
LIBOR plus 2.25%. The Company anticipates paying the final installment
(1,735,000 USD) of the loan in CHF. The loan was collateralized by a bill of
exchange issued by the Company.

During April 1999, the Company obtained a $1,500,000 USD denominated long-term
loan. The interest on this loan is at the three month USD LIBOR rate plus 1.4%
(approximately 7.47% and 8.00% at December 31, 1999 and 2000 respectively);
$1,000,000 is payable in November 2000, and $500,000 in May 2001. The loan has
been extended to May 2002. This loan is collaterized by inventory up to a value
of 3,500,000 PLN. The amount outstanding at December 31, 2000 is $1,500,000
USD.

7. LEASE OBLIGATIONS

On March 7, 2000, the Company signed an agreement to purchase a modern high
volume warehouse facility along with office accommodations. On November 1, 2000,
the Company, reconsidered its decision with respect to purchase of this complex
and determined it would be in their best financial interest to lease this
premise. The Company entered into an operating lease, which stipulated monthly
payments of $130,000 for five years. This lease cannot be terminated. The
Company has the option to renew the lease in five years. The following is a
schedule by years of the future rental payments under the non-cancelable
operating lease as of December 31, 2000.

Year ending December 31
2001 $ 1,560
2002 1,560
2003 1,560
2004 1,560
2005 1,300
--------
$ 7,540
========

There were no operating nor financial leases except as discussed above as at
December 31, 2000.

The lease of the high volume warehouse has allowed the Company to consolidate
much of their storage space in and around Warsaw. The Company still has in
effect rental agreements for all of its regional offices and other warehouse
space. Monthly rentals range from approximately $2,000 to $11,670. All of the
regional office and warehouse leases can be terminated by either party within
two or three months prior notice. The retail shop lease has no stated expiration
date, but can be terminated by either party with three months prior notice.

The rental expense incurred under operating leases during 1998, 1999 and 2000
was as follows:

1998 1999 2000
----- ----- ------

Rent expense $ 519 $ 754 $1,442
===== ===== ======

CENTRAL EUROPEAN DISTRIBUTION CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Monetary amounts in columns expressed in thousands
(except per share information)

8. SHORT-TERM BANK LOANS AND OVERDRAFT FACILITIES

On August 1, 2000, the Company signed an agreement for a short term loan of
$233,110. The annual interest rate is 1 month LIBOR plus 0.8%. The interest is
paid monthly. The loan is repayable on June 16, 2001. In August 2000 the Company
extended this facility to reflect increased trade, the increase was by $459,000
with the same terms applying.

In December 2000, the Company obtained an overdraft facility of 5,000,000 Polish
Zloty. The interest is charged on the daily balance at rate of 1 month WIBOR
plus 1,25%. As at December 31, 2000 the balance on the overdraft was 4,776,535
Polish zloty ($1,152,861 USD).

The weighted average interest rate on short-term borrowings at December 31, 2000
and 1999 was approximately 7.8%, and 5.8% respectively. Total interest paid in
1998, 1999 and 2000 is substantially equal to the interest expense disclosed in
the consolidated statements of income.

9. EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per
share for the periods indicated.

1998 1999 2000
------- ------ ------
Basic:
Net income $ 1,468 $1,902 $ 985
======= ====== ======
Average shares outstanding 2,635 4,050 4,334
======= ====== ======
Basic EPS $ 0.56 $ 0.47 $ 0.23
====== ====== ======
Diluted:
Net income $ 1,468 $1,902 $ 985
======= ====== ======

Average shares outstanding 2,635 4,050 4,334
Net effect of dilutive stock options - -- -- --
based on the treasury stock method
------- ------ ------
Totals 2,635 4,050 4,334
======= ====== ======
Diluted EPS $ 0.56 $ 0.47 $ 0.23
======= ====== ======

No stock options have been exercised during the period. Warrants granted in
connection with the 1998 IPO and stock options granted in 1998, 1999 and 2000
have been excluded from the above calculations of diluted shares since the
exercise price is equal to or greater than the average market price of the
common shares during 1998, 1999 and 2000.

10. ACQUISITIONS

On March 31, 2000, the Company purchased 100% of the voting shares of Polskie
Hurtownie Alkoholi Sp. z o.o. (PHA) for $4.0 million cash and 268,126 shares
of Common Stock. The shares issued may not be sold without the Company's consent
for three years subsequent to the acquisition. As part of the purchase agreement
with PHA, a non-compete agreement was established with the former stockholders
for a period of three years.

CENTRAL EUROPEAN DISTRIBUTION CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Monetary amounts in columns expressed in thousands
(except per share information)

The Company obtained an independent valuation for this acquisition. The cost of
the acquisition was allocated to the tangible assets acquired based on the fair
values at dates of acquisition and estimated values per the valuation report.
The excess ($5,490,000) of the cost over the amounts allocated as described
above represents goodwill. Management will finalize the purchase price
allocations during the first quarter of 2001 upon the settlement of various
contingent issues. No significant adjustments are expected to result from the
finalization of the purchase price allocations.

On March 12,1999, the Company purchased certain business assets (excluding those
related to the production of distilled products) and the trademark of Multi
Trade Company ("MTC" - a Partnership distributing alcoholic beverages in Poland)
for $2.9 million cash and 254,230 shares of Common Stock. This stock cannot be
sold for three years without the consent from the Company. On May 10, 1999, the
Company purchased certain business assets, and trademark of The Cellar of Fine
Wines Sp. z o.o. ("CFW" - a limited liability company distributing wine in
Poland) for $ 1.8 million cash and 100,000 shares of Common Stock. Restrictions
on the sale of this stock expired on July 1, 2000. The values assigned to the
Common Stock issued in these transactions were based on market value at the time
of the transactions and reduced by 10% for the effect of the restrictions on
sale.

The Company obtained independent valuations for both of these investments. The
cost of the acquisitions was allocated to the tangible and identifiable
intangible assets acquired based on the fair values at dates of acquisition and
estimated values per the valuation reports. The excess ($2,913,000) of the cost
over the amounts allocated as described above represents goodwill. Management
finalized the purchase price allocations during the last quarter of 1999 upon
the completion of the valuations of the companies. No significant adjustments
resulted from the finalization of the purchase price allocations.

Assuming consummation of all three purchases and the issuance of common shares
as of January 1, 1999, the unaudited proforma consolidated operating results for
1999 and 2000 are as follows:

1999 2000
-------- --------

Net sales $140,488 $140,706
Net income 2,197 868
Net income per share data:
Basic and diluted $ 0.50 $ 0.19

11. FINANCIAL INSTRUMENTS, COMMITMENTS AND CONTINGENT LIABILITIES

FINANCIAL INSTRUMENTS WITH ON-BALANCE SHEET RISK AND THEIR FAIR VALUES

Financial instruments with on-balance sheet risk include cash and cash
equivalents, accounts receivable, certain other current assets, trade accounts
payable, bank loans, overdraft facilities, long-term debt and other payables.
These financial instruments are disclosed separately in the consolidated balance
sheets and their carrying values approximate their fair market values. The
Companies on-balance sheet risk is minimum as the financial instruments are
denominated in stable currencies and they are of a short-term nature whose
interest rates approximate current market rates.

CENTRAL EUROPEAN DISTRIBUTION CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Monetary amounts in columns expressed in thousands
(except per share information)

CONCENTRATIONS OF CREDIT RISK

Financial instruments that potentially subject the Company to concentration of
credit risk consist primarily of accounts receivable from Polish companies. The
Company restricts temporary cash investments to financial institutions with high
credit standing. Credit is given to customers only after a thorough review of
their credit worthiness. The Company does not normally require collateral with
respect to credit sales. The Company routinely assesses the financial strength
of its customers. As of December 31, 2000 and 1999, the Company had no
significant concentrations of credit risk. The Company has not experienced large
credit losses in the past.

INFLATION AND CURRENCY RISK

Since the fall of Communist rule in 1989, Poland has experienced high levels of
inflation and significant fluctuations in the exchange rate for the zloty. The
Polish government has adopted policies that slowed the annual rate of inflation
from approximately 250% in 1990 to approximately 8.6% in 1998, 9.8% in 1999 and
8.5% in 2000. The exchange rate for the zloty had stabilized in 1998 and 1999
and the rate of devaluation of the zloty had decreased for the last several
years. During the first two quarters of 2000, the zloty decreased in value in
respect to the US dollar, while in the latter half of the year made a strong
recovery against the US dollar. Inflation and currency exchange fluctuations
have had, and may continue to have, an adverse effect on the financial condition
and results of operations of the Company.

A portion of Carey Agri's, MTC's, CFW's AND PHA's accounts payable and operating
expenses are expected to continue to be, denominated in or indexed to the U.S.
Dollar or other non-Polish denominated currency. By contrast, substantially all
of the Company's revenue is denominated in Polish zloty. Any devaluation of the
zloty against the U.S. Dollar or other currencies that the Company is unable to
offset through price adjustments will require the Company to use a larger
portion of its revenue to service its non-zloty denominated obligations. While
the Company may enter into transactions to hedge the risk of exchange rate
fluctuations, it is unlikely that the Company will be able to obtain hedging
arrangements to completely eliminate the currency risk. Accordingly, shifts in
the currency exchange rates may have an adverse effect on the ability of the
Company to service its non-zloty denominated obligations and, therefore may have
an effect on the Company's financial condition and results of operations.

SUPPLY CONTRACTS

The Company has various agreements covering its sources of supply, which, in
some cases, may be terminated by either party on relatively short notice. Thus,
there is a risk that a significant portion of the Company's supply of products
could be curtailed at any time. The Company has made payments to suppliers to
secure longer term sources of supply. Management is confident that in the case
of a curtailment of supplies, a new supplier could be obtained quickly without
any material effect on the operations.

CONTINGENT LIABILITIES

The Company is involved in some litigation and has claims against it for matters
arising in the ordinary course of business. In the opinion of management, the
outcome will not have a material adverse effect on the Company's operations.

CENTRAL EUROPEAN DISTRIBUTION CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Monetary amounts in columns expressed in thousands
(except per share information)

12. INCOME TAXES

Income tax expense consists of the following:

YEAR ENDED DECEMBER 31,
-------------------------------
1998 1999 2000
------- ------- -------

Current Polish income tax expense $ 889 $ 1,268 $ 687
Deferred Polish income tax (benefit) expense, net 34 (101) (195)
Deferred US income tax (benefit) expense (62) (61) 11

------- ------- -------
Total income tax expense $ 861 $ 1,106 $ 503
======= ======= =======

Total Polish income tax payments (or amounts used as settlements against other
statutory liabilities) during 1998, 1999 and 2000 were $725,000, $1,313,000, and
$532,000 respectively. CEDC has paid no U.S. income taxes and has net opening
loss carry forwards, amounting to $306,000 which expire in 2013 and 2014.

Total income tax expense varies from expected income tax expense computed at
Polish statutory rates (36% in 1998, 34% in 1999 and 30% in 2000) as follows:

YEAR ENDED DECEMBER 31,
-------------------------------
1998 1999 2000
------- ------- -------

Tax at Polish statutory rate $ 838 $ 1,023 $ 446
Increase/(Reduction), in deferred tax asset valuation allowance
relating primarily to bad debt expense (30) 46 124
Tax rate differential resulting from US activities 6 -- --
Effect of foreign currency exchange rate change on net deferred
tax assets and reduction of deferred tax asset due to changes
in tax rates 1 14 (47)
Permanent differences:
Non-taxable interest (9) (15) (20)
Non-deductible taxes 6 16 --
Non-deductible transportation taxes 23 7 --
Other non-deductible expenses 26 15 --

------- ------- -------
Income tax expense $ 861 $ 1,106 $ 503
======= ======= =======

Significant components of the Company's deferred tax liabilities and assets are
as follows:

DECEMBER 31,
---------------
1999 2000
----- -----

Deferred tax assets:
Allowance for doubtful accounts receivable $ 98 $ 382
Unrealized foreign exchange losses (gains), net 112 (75)
Accrued expenses and deferred income 17 147
Carey Agri operating loss carry forward expiring 134
2005

CENTRAL EUROPEAN DISTRIBUTION CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Monetary amounts in columns expressed in thousands
(except per share information)

CEDC operating loss carry-forward benefit, 123 81
Expiring in 2013 - 2014
----- -----
Total deferred tax assets $ 350 $ 669
Less valuation allowance (49) (173)
----- -----
Net deferred tax asset $ 301 $ 496
===== =====
Shown as:
Current deferred tax asset $ 107 $ 416
Long-term deferred tax asset 194 80
----- -----
$ 301 $ 496
===== =====

Valuation allowances are provided when it is more likely than not that some or
all of the deferred tax assets will not be realized in the future. These
evaluations are based on expected future taxable income and expected reversals
of the various net deductible temporary differences. The valuation allowance
relates primarily to the future tax deductibility of the allowance for bad
debts.

Management intends that the undistributed earnings from the Polish subsidiaries
of $ 4,800,000 will be permanently reinvested. Therefore, no deferred taxes have
been created for these earnings. If the earnings were distributed in the form of
a dividend or otherwise, a portion would be subject to both U.S. income taxes
and Polish withholding taxes, less an adjustment for foreign tax credits. The
Company estimates the deferred tax liability to be approximately $ 1,300,000
based on the undistributed earnings of Carey Agri, MTC, CFW and PHA at December
31, 2000. This amount would, in part, be available to reduce some portion of
U.S. tax liability from foreign source income. Determination of the actual
amount of U.S. income tax liability that would be incurred is complex and
subject to various factors existing at the time of any distribution of foreign
earnings to CEDC.

In November 1999, legislation was enacted in Poland which reduced the corporate
income tax rates in Poland effective January 1, 2000. The expected tax rate of
32% was reduced to 30% in 2000, 28% in 2001 and 2002, 24% in 2003 and 22%
thereafter.

Carey Agri's, MTC's, CFW's and PHA's tax liabilities (including corporate income
tax, Value Added Tax (VAT), social security and other taxes) may be subject to
examinations by Polish tax authorities for up to five years from the end of the
year the tax is payable. CEDC's US federal income tax returns are also subject
to examination by the US tax authorities. As the application of tax laws and
regulations, and transactions are susceptible to varying interpretations,
amounts reported in the consolidated financial statements could be changed at a
later date upon final determination by the tax authorities.

13. RELATED PARTY TRANSACTIONS

A director of CEDC is also the director of one of the Company's suppliers of
wine. Purchases from this company amounted to approximately $750,000, $471,600
and $ 630,000 in 1998, 1999 and 2000, respectively.

This company is owed $19,000 as at December 31, 2000 for purchases made during
2000.

The Company rents under a short term rental agreement from the Company's
president a retail unit. The rent is $2,200 per quarter. The total paid during
2000 was $8,800 USD.

CENTRAL EUROPEAN DISTRIBUTION CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Monetary amounts in columns expressed in thousands
(except per share information)

14. STOCK OPTION PLANS AND WARRANTS

INCENTIVE PLAN

In November 1997, the CEDC 1997 Stock Incentive Plan ("Incentive Plan") was
created. This Incentive Plan provides for the grant of stock options, stock
appreciation rights, restricted stock and restricted stock units to directors,
executives, and other employees of CEDC and any of its subsidiaries or of any
service providers. The Incentive Plan authorizes the issuance of up to 750,000
shares of Common Stock (subject to anti-dilution adjustments in the event of a
stock split, recapitalization, or similar transaction). The compensation
committee of the board of directors will administer the Incentive Plan. The
Company has reserved 750,000 shares for future issuance in relation to the
Incentive Plan.

The option exercise price for incentive stock options granted under the
Incentive Plan may not be less than 100% of the fair market value of the Common
Stock on the date of grant of the option. Options may be exercised up to 10
years after grant, except as otherwise provided in the particular option
agreement. Payment for shares purchased under the Incentive Plan shall be made
in cash or cash equivalents. With respect to any participant who owns stock
possessing more than 10% of the voting power of all classes of stock of CEDC,
however, the exercise price of any incentive stock option granted must equal at
least 110% of the fair market value on the grant date and the maximum term of an
incentive stock option must not exceed five years.

A summary of the Company's stock option activity, and related information for
the years ended December 31, 1999 and December 31, 2000 as follows:

Options (000) Options (000) Weighted-Average Weighted-Average
1999 2000 Exercise Exercise
Price-1999 Price-2000

Outstanding at January 1, 211 231 --
Granted 40 25 $6.65 $4.20
Exercised -- -- -- --
Forfeited (20) -- 6.50 --
------------------------------------------------------------------

Outstanding at December 31, 231 256 $7.32 $7.02

Exercisable at December 31, 106 185 $7.15 $6.69

Weighted-average fair value of options
granted - - $2.50 $1.60

Exercise prices for options outstanding as of December 31, 2000 ranged from
$4.00 to $8.00. The weighted-average remaining contractual life of those options
is approximately 7 years as of December 31, 2000. The table above does not
include options mentioned below where the exercise price is unknown or for the
warrants discussed below.

STOCK OPTIONS GRANTED

CEDC has granted stock options in early 1998 to its executive officers and
members of the Board of Directors for 82,500 shares of Common Stock in
connection with its initial public offering. The exercise price for 57,500 of
these options is the initial public offering price of $ 6.50 per share. The
exercise price of

CENTRAL EUROPEAN DISTRIBUTION CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Monetary amounts in columns expressed in thousands
(except per share information)

10,000 options was the average trading price of Common Stock for the last five
trading days of 1998 of $5.70. The exercise price of 15,000 options is $4.94
These options were forfeited in 1999.

The Company has granted stock options under the Incentive Plan for 129,250
shares of Common Stock in September 1998 to certain of its employees. Options
for 21,500 shares have an exercise price of $6.50 and may be exercised from
September 1999 to September 2001. Options for 43,000 shares have an exercise
price of $6.90 and are exercisable from September 2000 to September 2001.
Options for 64,750 shares have an exercise price of $4.21 and are exercisable
from August 2001 to September 2001.

Pro forma information regarding net income and earnings per share is required by
SFAS No. 123, and has been determined as if the Company had accounted for its
incentive stock options under the fair value method of that Statement.

In regards to the options granted in connection with the initial public
offering, the Company has estimated the fair market value of the stock
underlying these options to be approximately 50% of the planned public offering
price due to various uncertainties as of the time of grant. This is less than
the present value of the expected exercise price. Therefore, the fair value of
the options granted in connection with the initial public offering has been
estimated to be minimal under the provisions of SFAS No. 123.

As for the other stock options granted to employees, the fair value was
estimated at the date of grant using a Black-Scholes option pricing model with
the following weighted-average assumptions for 1998, 1999 and 2000 risk-free
interest rate of 5.5% dividend yield of 0%, volatility factors of the expected
market price of the Company's Common Stock of 0.68, and a weighted-average
expected life of the option of 2 years.

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded options which have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly
subjective assumptions including the expected stock price volatility. Since the
Company's employee stock options have characteristics significantly different
from those of traded options, and because changes in the subjective input
assumptions can materially affect the fair value estimate, in management's
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its employee stock options.

For purposes of pro forma disclosures, the estimated fair value of the options
is amortized to expense over the options' vesting period. The effect of any
forfeitures is recognized when they occur. The Company's pro forma information
for 1998, 1999 and 2000 is as follows:

1998 1999 2000

Net income as recorded $1,468 $1,902 $ 985
Pro forma net income $1,450 $1,770 $ 825

Pro forma earnings per share:

Basic and fully diluted $ .55 $ .44 $ .19

CENTRAL EUROPEAN DISTRIBUTION CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Monetary amounts in columns expressed in thousands
(except per share information)

OPTIONS GRANTED TO VENDORS

In late 1998, the Company granted options to a vendor for 50,000 shares of
common stock in exchange for a three-year service contract. These options are
exercisable from March 1999 until September 2001 at the following prices: $6.50
until September 1999, $8.00 until September 2000, and $9.00 until September
2001. Under APB 25 and FASB 123, the fair value of options given to vendors must
be expensed over the service period. Using the Black Scholes method described
above, with similar assumptions, the fair value of these options was $75,000.
This amount is being expensed over three years.

In 1999, the Company granted options to a consulting firm for 75,000 shares of
common stock in exchange for a one-year service contract involving various
acquisition consultations. The exercise price of the options is $8.00. These
options shall be exercisable at any time during a period of nine years
commencing March 5, 2000. Using the Black-Scholes method, 75 periods were used
to determine the volatility of the price. The value of the options is
approximately $135,000. Based upon the 10 months of the service contracts ended
December 31, 1999, costs of $112,500 were capitalized to the purchase of MTC and
CFW or deferred with respect to the other pending acquisitions.

The above options were excluded from the calculation of earnings per share as
the effect would not be dilutive.

WARRANTS

In connection with its initial public offering in 1998, the Company agreed to
sell to its underwriters or their designees (for nominal consideration) warrants
to purchase 200,000 shares of common stock from the Company. The warrants are
exercisable at any time during a period of four years commencing one year from
the date of the final prospectus (August 1998) used in the Company's initial
public offering. The exercise price of the warrants is 130% of the initial
public offering price ($8.45 per share).

The above options were excluded from the calculation of earnings per share as
the effect would not be dilutive.

15. SHARE REPURCHASE PROGRAM

On November 27, 2000, the Company's Board of Directors authorized a share
repurchase program to buy up to 200,000 shares in the open market In 2000, the
Company repurchased 64,100 shares in the open market for $120,000 USD including
costs. The Company may purchase the remaining authorized shares over the next
twelve months in the open market.

16. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

First Quarter Second Quarter Third Quarter Fourth Quarter

1999 2000 1999 2000 1999 2000 1999 2000
(A) (B) (C)

Sales $14,241 $18,720 $23,533 $31,323 $25,676 $32,103 $26,790 $49,087

CENTRAL EUROPEAN DISTRIBUTION CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Monetary amounts in columns expressed in thousands
(except per share information)

Gross Profit 2,098 2,800 3,229 4,097 3,531 4,197 3,911 6,452

Operating Income 560 247 759 850 1,151 491 762 1,260

Net Income $333 $23 $647 $87 $410 $119 $512 $756

Net Income per
Common
Stock-Basic and

Diluted $0.09 $0.01 $0.16 $0.02 $0.10 $0.02 $0.12 $0.18

(A) Purchase of MTC
(B) Purchase of PHA
(C) Purchase of CFW

ITEM 9. CHANGES IN AND DISAGREEMTNS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE

Not Applicable.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information with respect to directors and executive officers of the
Company is incorporated herein by reference to the proxy statement for the
annual meeting of stockholders to be held on April 30, 2001.

ITEM 11. EXECUTIVE COMPENSATION

The information with respect to executive compensation and transactions
is incorporated here by reference to the proxy statement for the annual meeting
of stockholders to be held on April 30, 2001.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information with respect to security ownership of certain
beneficial owners and management is incorporated herein by reference to the
proxy statement for the annual meeting of stockholders to be held on April 30,
2001.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information with respect to certain relationships and related
transactions is incorporated herein by reference to the proxy statement for the
annual meeting of stockholders to be held on April 30, 2000.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8K

(a)(1) The following consolidated financial statements of the Company
and report of independent auditors are included in Item 8 of the Form 10-K.

Report of Independent Auditors

Consolidated Balance Sheets at December 31,1999 and 2000.

Consolidated Statements of Income for the years ended December 31,
1998, 1999 and 2000

Consolidated Statements of Changes in Stockholders' Equity for the
years ended December 31, 1998, 1999, and 2000

Consolidated Statements of Cash Flows for the years ended December 31,
1998, 1999 and 2000

Notes to Consolidated Financial Statements

(a)(2) Schedules

All schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission either have been
included in the Company's consolidated financial statements or the
notes thereto, are not required under the related instructions or are
inapplicable, and therefore have been omitted.

(a)(3) The following exhibits are either provided with this Form 10-K
or are incorporated herein by reference.

Exhibit

NUMBER EXHIBIT DESCRIPTION

2.1 Contribution Agreement among Central European Distribution Corporation
and William V. Carry, William V. Carry Stock Trust, Estate of William
O. Carry and Jeffrey Peterson dated November 28, 1997 (Filed as
Exhibit 2.1 to the Registration Statement on Form SB-2, File No.
333-42387, with the Commission on December 17, 1997 [the "1997
Registration Statement'] and incorporated herein by reference.)

3.1 Certificate of Incorporation (Filed as Exhibit 3.1 to the 1997
Registration Statement and incorporated herein by reference.)

3.2 Bylaws (Filed as Exhibit 3.2 to the 1997 Registration Statement and
incorporated herein by reference.)

4.1 Form of Common Stock Certificate (Filed as Exhibit 4.1 to the 1997
Registration Statement and incorporated herein by reference.)

4.2 Form of Warrant Agreement and attached form of Representatives'
Warrant (Filed as Exhibit 4.2 to Amendment No. 1 on Form S-1 to Form
SB-2 Registration Statement, File No. 333-42387, with the Commission
on April 17, 1998 [the "First 1998 Registration Statement"] and
incorporated herein by reference.)

10.1 1997 Stock Incentive Plan (Filed as Exhibit 10.1 to the 1997
Registration Statement and incorporated herein by reference.)

10.1(a) Amendment to 1997 Stock Incentive Plan (Filed as 10.1(a) to Amendment
No. 2 to Form S-1 Registration Statement, File No. 333-42387, with the
Commission on May 19, 1998 [the "Second 1998 Registration Statement"]
and incorporated herein by reference.)

10.2 Employment agreement with William V. Carey (Filed as Exhibit 10.8 to
the 1997 Registration Statement and incorporated herein by reference.)

10.2(a) Amendment to employment agreement with William V. Carey (Filed as
Exhibit 10.9(a) to the Second 1998 Registration Statement and
incorporated herein by reference.)

10.3 Employment agreement with Jeffrey Peterson (Filed as Exhibit 10.9 to
the 1997 Registration Statement and incorporated herein by reference.)

10.4 Employment agreement with Neil Crook and the Company (Filed as Exhibit
10.11 to the First 1998 Registration Statement and incorporated herein
by reference.)

10.5 Employment agreement with Neil Crook and Carey Agri International
Poland Sp. z o.o. (Filed as Exhibit 10.12 to the First 1998
Registration Statement and incorporated herein by reference.)

10.6 Employment agreement with Evangelos Evangelou and CEDC 10.7 Employment
agreement with Evangelos Evangelou and Carey Agri 10.8 Form of
distribution contract with Polmos vodka producers (Filed as Exhibit
10.5 to the 1997 Registration Statement and incorporated herein by
reference.)

10.9 Distribution contract between Carey Agri and United Distillers
Finalandia Group Sp z.o.o. dated January 1, 1995 (Filed as Exhibit
10.4 to the 1997 Registration Statement and incorporated herein by
reference.)

10.10 Distribution contract with UDV Poland Sp. z.o.o. dated July 3, 1997
(Filed as Exhibit 10.6 to the 1997 Registration Statement and
incorporated herein by reference)

10.11 (a) Amendment, updated, to the distribution contract with UDV Poland
Sp. z.o.o. dated July 3, 1997 (Filed as Exhibit 10.6 (a) to the first
1998 Registration Statement and incorporated herein by reference.)

10.12 Distribution Agreement with Przedsiebiorstwo Przemyslu Spirytusowego
"Polmos" dated September 16, 1996.

10.13 Distribution Agreement with Unicom Bols Group dated April 1, 1998.

10.14 Distribution Agreement with PP Slaska Wytwornia Wodek Gatunkowych
"Polmos".

21 Subsidiaries of the Company (Filed as Exhibit 21 to the 1997
Registration Statement and incorporated herein by reference.)

(b) Reports on form 8-K in the fourth quarter of 2000

Reports on Form 8-K filed on December 5, 2000 under Item 14.

Reports on Form 8-K filed on December 11, 2000 under Item 14.

The response to this portion of Item 14 is submitted in response
to Item 14 (a) (3).

(d) Financial Statement Schedules

None.

SIGNATURES

Pursuant to the requirements of the Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Central European Distribution Corporation

By: /s/ WILLIAM V. CAREY
-----------------------------------------
William V.Carey

CHAIRMAN, PRESIDENT, AND CHIEF EXECUTIVE OFFICER

Date: March 30, 2001

Pursuant to the requirements of the Securities Exchange Act of 1933, this report
has been signed by the following persons on behalf of the registrant and in the
capacities and on the dates indicated below.

SIGNATURE TITLE DATE
--------- ----- ----

/s/ WILLIAM V. CAREY Chairman, President and Chief Executive MARCH 30, 2001
- ------------------------------------ Officer (Principal executive officer)
WILLIAM V. CAREY

/s/ JEFFREY PETERSON Vice Chairman and Executive Vice President MARCH 30, 2001
- ------------------------------------
JEFFREY PETERSON

/s/ NEIL CROOK Vice President and Chief Financial Officer MARCH 30, 2001
- ------------------------------------ (Principal financial and accounting officer)
NEIL CROOK

/s/ ALAN DICKSON Director MARCH 30, 2001
- ------------------------------------
ALAN DICKSON

/s/ JAMES T. GROSSMANN Director MARCH 30, 2001
- ------------------------------------
JAMES T. GROSSMANN

/s/ TONY HOUSH Director MARCH 30, 2001
- ------------------------------------
TONY HOUSH

/s/ JAN W. LASKOWSKI Director MARCH 30, 2001
- ------------------------------------
JAN W. LASKOWSKI

/s/ JOE M. RICHARDSON Director MARCH 30, 2001
- ------------------------------------
JOE M. RICHARDSON