The Jean Coutu Group Takes Position on the TobaccoIssue.

LONGUEUIL, QUEBEC--(BUSINESS WIRE)--July 21, 1998--Jean Coutu (TSE:PJC.A.) (ME:PJC.A.) In the wake of all the controversy surrounding the sale of tobacco products in outlets adjoining pharmacies, the management of The Jean Coutu Group (PJC) Inc. has decided to clarify the situation and state its

The Jean Coutu Group wishes first to make clear that the decisions passed down by the Tribunal des professions on June 19 and by the Superior Court on Friday, July 17, in no way required outlets owner-pharmacists to immediately suspend the sale of tobacco products. The order banning the sale of tobacco products was issued by the Quebec Order of Pharmacists (the Order) on June 22, even though other less radical and less immediate courses of action were available.

Indeed, the Group has difficulty understanding how the Order can immediately prohibit the sale of tobacco products in outlets adjoining pharmacies when the National Assembly unanimously adopted the Tobacco Bill allowing adjoining businesses to continue selling these products for a period of slightly more than two years, or up until October 1, 2000.

As Richard Mayrand, The Jean Coutu Group's Vice-President, Professional Activities, stated, "the present matter does not only concern the actors who are on center stage. Above all, we must not forget the economic impact on the outlets owner-pharmacists who have not finished amortizing and reimbursing the goodwill they purchased when they acquired their pharmacy and adjoining outlet. The immediate removal of tobacco products from these establishments will also have the effect of considerably reducing gross revenues and the number of customers, and therefore threaten job losses and financial problems in many establishments."

The management of The Jean Coutu Group deplores the Order's intransigence, which will result in economic damages to professionals who have financial obligations to meet. A two-year moratorium, as stipulated by the Tobacco Bill, would enable outlets owner-pharmacists to identify stopgap measures to compensate for the losses resulting from the withdrawal of tobacco products.

The Group wishes to underline again that the purpose of this intervention is not to call into question the two-year grace period provided for under the Tobacco Bill but rather to contest the immediate removal of these products as imposed by the Order. It is for that reason that an appeal under judicial review of the decision of the Tribunal des professions has been instituted. The hearing is scheduled for this upcoming August 3 and 4.

Finally, the Group hopes that, above and beyond the current legal debate, someone will insist upon asking the real questions about tobacco use and propose veritable solutions aimed at substantially reducing access to tobacco products.

According to M. Mayrand, "it is clear that dropping from 30 000 points of sale to 29 300 will have no impact on tobacco use. This debate is therefore not about public health."

The Jean Coutu Group wishes to reiterate the statements it made in its June 23 press release and assure its shareholders and financial stakeholders that it derives no revenue whatsoever from the sale of tobacco products in the Jean Coutu establishments within its network, neither as a wholesaler nor as a franchiser. The decisions handed down to date therefore have no direct impact on the operations of The Jean Coutu Group.

        CONTACT:  The Jean Coutu Group (PJC) Inc.
                   Mylene Godin, 450/ 646-9611, ext. 1307
                   (514) 842-1433, ext. 350
                   (514) 823-5482