VANCOUVER, Canada – January 2, 2008 – Russell Breweries Inc. (“Russell”) (TSX.V:RB) a producer of premium craft beer in Western Canada, is pleased to announce that it entered into a loan agreement (the “Loan Agreement”) on December 31, 2007, pursuant to which the “Lender”, a shareholder of Russell, provided to Russell a loan (the “Loan”) valued at maturity in the amount of $1,239,000. A discounted value or Loan advance amount of $965,000 is calculated based on an 8.5% per annum interest rate, calculated semi-annually, with interest payable on maturity resulting in a total loan value at maturity of $1,239,000. In consideration of the Lender agreeing to provide the Loan, the Lender will also earn a bonus of $25,000 to be deducted from the Loan advance amount for a net advance to Russell of $940,000. The term of the Loan is three years. The Company may repay the Loan at any time without penalty by paying the discounted Loan advance amount of $965,000 together with accumulated interest.

The Loan is guaranteed by Russell Breweries Company Ltd. (“RBCL”) and Fort Garry Brewing Company Ltd. (“Fort Garry”), both wholly-owned subsidiaries of Russell. Russell intends to repay the Loan by utilizing cash flow or by a debt or equity refinancing.

Russell intends to use the proceeds of the Loan for its brewery operations, the launch of packaged products in British Columbia, capital expenditures, miscellaneous expenditures and for general working capital.

As security for the Loan, Russell, RBCL, and Fort Garry will grant to the Lender a subordinated security agreement creating a security interest and charge over all of their respective property and assets subordinate to senior debt and senior security of up to $2.5 million plus capital lease obligations incurred for future acquisitions of equipment and other capital assets.

As a bonus, Russell intends to issue 250,000 warrants (the “Warrants”) to the Lender, each warrant entitling the holder to purchase one Russell common share at a price of $0.65 per share. The Warrants will expire two years after the date of issuance. The Warrants and any shares issued upon exercise of the Warrants are subject to a hold period of four months plus one day from the date of issuance of the Warrants.

The Loan and the issuance of the Warrant in connection therewith are subject to final acceptance by the TSX Venture Exchange.