retail food group, page-6

ANNOUNCEMENT
BRUMBY'S BAKERIES LIMITED (BSX:BBH)

On the 8th January 2007 the sub-committee of the Board of Brumby's announced details of a competing offer that had been received from the syndicate of director Marcus Barlow, CEO and managing director, Michael Sherlock, and company secretary Steve Brown. This followed an announcement on the 18th December 2006 that Brumby's had entered into a Merger Implementation Agreement with Retail Food Group Limited (RFG).

The offer from the syndicate is to acquire 79.06% of the company held in non-associated shareholder's hands for $2.80 cash for each BBH share and a fully-franked dividend of 10.883 cents per share.

The sub-committee of the Board wishes to inform the market that it has been advised by the syndicate that the timing for its financiers is as follows:
* Friday 2 February - NAB, the primary financier, expected to have all due diligence reports completed.
* Friday 9 February - Target date for any final letter of offer from NAB to the syndicate.

The syndicate has advised that it expects the timing for the mezzanine financier to mirror that of the NAB outlined above.

The syndicate has also proposed a variation to the treatment of employee options.

The syndicate proposes to offer non-associated employee holders cash of $1.55 per option and that there will be no option exchange for those option holders. In relation to the options held by Michael Sherlock and Steve Brown, the syndicate proposes an option exchange arrangement, the details of which remain to be provided to the board sub-committee.

The sub-committee of the Board awaits the outcome of these matters before making a recommendation to shareholders on the syndicate's offer.

In the meantime, the sub-committee of the Board continues to progress the RFG Scheme in accordance with the company's contractual obligations under the RFG Merger Implementation Agreement.