Kraft Foods to Sell Stella D'oro to Better Focus Its Brand Portfolio

"This decision is consistent with Kraft's strategy to shift ourportfolio toward businesses in which we have sustainable competitiveadvantage," said Dave Johnson, President, Kraft North AmericaCommercial (KNAC). "Selling this business enables us to better focusour time and resources on opportunities that provide Kraft with thegreatest potential for long-term growth."

The sale includes Kraft's manufacturing facility in Bronx, NewYork. As part of the transaction, approximately 180 Kraft employees,including management staff, hourly production workers and routedrivers servicing the metro NY area, will join Stella D'oro Holdings."We are grateful to the Stella D'oro employees for their commitmentand dedication to the business, and wish them continued success in thefuture," said Johnson.

Henk Hartong III of Brynwood Partners, who will serve as Chairman,Stella D'oro Holdings, LLC, said, "Brynwood Partners has extensiveexperience in the branded food industry, and we are looking forward toinvesting in the company and growing the Stella D'oro business in thedays ahead."

The transaction is expected to be completed in January 2006.

Kraft Foods markets many of the world's leading food brands,including Kraft cheese, Maxwell House and Jacobs coffees, Nabiscocookies and crackers, Philadelphia cream cheese, Oscar Mayer meats,Post cereals and Milka chocolates, in more than 155 countries.

For more information on Kraft Foods, please visit our website atwww.kraft.com.

Forward-Looking and Cautionary Statements

This press release contains projections of future results andother forward-looking statements. One can identify theseforward-looking statements by use of words such as "strategy,""expects," "plans," "anticipates," "believes," "will," "continues,""estimates," "intends," "projects," "goals," "targets" and other wordsof similar meaning. One can also identify them by the fact that theydo not relate strictly to historical or current facts. Thesestatements are based on the company's assumptions and estimates andare subject to risks and uncertainties. In connection with the "safeharbor" provisions of the Private Securities Litigation Reform Act of1995, the company is hereby identifying important factors that couldcause actual results and outcomes to differ materially from thosecontained in any forward-looking statement made by or on behalf of thecompany; any such statement is qualified by reference to the followingcautionary statements.

Each of the company's segments is subject to intense competition,changes in consumer preferences and demand for its products, includingdiet trends, the effects of changing prices for its raw materials andlocal economic and market conditions. Their results are dependent upontheir continued ability to promote brand equity successfully, toanticipate and respond to new consumer trends, to develop new productsand markets, to broaden brand portfolios, to compete effectively withlower priced products in a consolidating environment at the retail andmanufacturing levels and to improve productivity. The company'sresults are also dependent on its ability to consummate andsuccessfully integrate acquisitions and to realize the cost savingsand improved asset utilization contemplated by its restructuringprogram. The company may, from time to time, divest businesses thatare less of a strategic fit within its portfolio, and its results maybe impacted by either the gains or losses, or lost operating income,from the sales of those businesses. In addition, the company issubject to the effects of foreign economies, changes in taxrequirements, currency movements, fluctuations in levels of customerinventories and credit and other business risks related to itscustomers operating in a challenging economic and competitiveenvironment. The company's results are affected by its access tocredit markets, borrowing costs and credit ratings, which may in turnbe influenced by the credit ratings of Altria Group, Inc. Thecompany's benefit expense is subject to the investment performance ofpension plan assets, interest rates and cost increases for medicalbenefits offered to employees and retirees. The company's assessmentof the fair value of its operations for purposes of assessingimpairment of goodwill and intangibles is based on discountingprojections of future cash flows and is affected by the interest ratemarket and general economic and market conditions. The food industrycontinues to be subject to recalls if products become adulterated ormisbranded, liability if product consumption causes injury, ingredientdisclosure and labeling laws and regulations and the possibility thatconsumers could lose confidence in the safety and quality of certainfood products. The food industry is also subject to consumer concernsregarding genetically modified organisms and the health implicationsof obesity and trans-fatty acids. Developments in any of these areascould cause the company's results to differ materially from resultsthat have been or may be projected by or on behalf of the company. Thecompany cautions that the foregoing list of important factors is notexclusive. Any forward-looking statements in this press release aremade as of the date hereof. The company does not undertake to updateany forward-looking statement.