STRAUSS GROUP CONTINUES INVESTMENT IN GLOBAL EXPANSION,

FIRST HALF SALES TOTAL NIS 3.6 B, UP 10.3%

OPERATING AND NET PROFITS ERODING FOLLOWING THE
CONTINUED INCREASE IN INPUT COSTS

Tel Aviv, Israel, August 17, 2011 – The Strauss Group (STRS.TA) today reported its results for the second quarter and first half of 2011. 

Ofra Strauss, Chairperson of Strauss Group, said today "Strauss Group is dealing with complex challenges in Israel and abroad due to the volatility of global markets as characterized by sharp increases in raw material and manufacturing prices . Strauss has taken significant steps to absorb part of these cost increases.

Israel is currently in the throes of a public protest over the issue of the high cost of living. We are aware of the importance of this protest and understand that we have an obligation and responsibility to adjust our actions accordingly and in such a way as to try and meet the capabilities of consumers. These adjustments require an orderly evaluation and we are prepared to do our part along with government, retailers, manufacturers and farmers to find solutions to this problem. Strauss continues, however, to invest in developing advanced technologies and innovations in our areas of activity"

Gadi Lesin, President & CEO of Strauss Group, said today: “Strauss Group reports 16.6% sales growth in the second quarter, which is evident for all activities and geographies. Israel, the Group's home base, continues to have volume and value growth and we are continuing to invest in developing innovative products and solutions.

While sales continued to grow, operating and net profit eroded following the sharp increases in raw material and energy prices. The Group is preparing a plan that will allow Strauss to face the changes taking place in the food market with sensitivity and attention to consumer protests over the issue of food prices”.

"This quarter Strauss began selling Strauss Water products in China following the establishment of the JV with Haier Group and we completed the integration of acquisitions done in North America via Sabra and Strauss Coffee. We also announced the acquisition of the coffee brands Fino Grao in Brazil and Ambassador in Russia. In addition, we announced an expansion of our partnership with PepsiCo and the establishment of a global fresh food company. "