Avery Dennison Dedicates New Research Center in China

The Company’s total investment in China passes $200 million and is expected to approach $300 million by 2010, reflecting average annual sales growth rate of 25 percent for the last ten years.

KUNSHAN, Jiangsu, China - Jan 11, 2007 - Avery Dennison Corporation (NYSE:AVY) today announced the opening of the Philip M. Neal Asia Pacific Research Center, based in Kunshan, Jiangsu province in eastern China, that will act as a gateway for the Company’s new products and technology into the Asia Pacific region.

The state-of-the-art research center is named after Avery Dennison's fourth chief executive officer, who retired from the company and its board of directors in 2005. It is the latest in a series of investments that reflect the Company's ongoing commitment to growth and technology in this fast-growing region. These investments include manufacturing, distribution and sales operations in Guangzhou, Nansha, Kunshan, Tianjin, Chengdu, Fuzhou, Qingdao, Suzhou and Shanghai.

"The economic growth in China and the Asia Pacific region during the last 30 years, and particularly in the last decade, has been phenomenal," said Dean A. Scarborough, president and chief executive officer. "We expect that growth to continue and see these economies as major drivers of worldwide economic expansion. As our customers in this region grow and their needs expand, the mission of the Philip M. Neal Asia Pacific Research Center is to develop technology and products for China and the Asia Pacific region and to establish technical relationships with leading global customers that have businesses and facilities in this part of the world."

The facility will be used to conduct extensive testing, analysis and engineering of pressure-sensitive constructions that will support major strategic initiatives in the region. The Neal Research Center is more than 4,000 square meters in size, houses 12 research laboratories and will employ 50 engineers and scientists, when fully staffed. To accelerate the product development process, a new pilot coater will also be installed to enable a variety of coating trials and generate new product samples.

"The new research center is strategically located close to our production facilities and our customers' operations," said Martin Daffner, research and development director of the research center. "This proximity enables us to respond quickly to customers' needs and ensures effective communication with production and marketing teams. The center also allows us to design and develop pressure- sensitive products for the Asian market and fine tune throughout the production process, from raw material to end-user application."

Avery Dennison's presence in China has grown dramatically since it made its first substantial investment in China in 1995 with the construction of a pressure-sensitive adhesive materials manufacturing facility in Kunshan. Since then, it has invested more than $200 million and expects its total investment in China to approach $300 million by 2010. Today, it has manufacturing, distribution and sales operations at 18 sites in China and employs approximately 3,850 people.

In addition to the Neal Research Center, Avery Dennison is scheduled to open two new manufacturing facilities in China this year. The Company's Specialty Tape Division will open a plant in Kunshan in March and its Retail Information Services group will open a manufacturing facility in nearby Suzhou.

"We are proud to be part of China's great economic expansion," Scarborough added. "Our investment in China has produced outstanding results for Avery Dennison. In China, we have been averaging more than 25 percent annual growth for the past ten years and are now the country's largest producer of pressure-sensitive label materials, tags and tickets for the retail apparel markets. We look forward to continued strong growth during the years ahead."

Background Information

Avery Dennison is a global leader in pressure-sensitive labeling materials, office products and retail tag, ticketing and branding systems. Based in Pasadena, Calif., Avery Dennison is a FORTUNE 500 company with 2005 sales of $5.5 billion. Avery Dennison employs more than 22,000 individuals in 49 countries worldwide who apply the Company’s technologies to develop, manufacture and market a wide range of products for both consumer and industrial markets. Products offered by Avery Dennison include Avery-brand office products and graphics imaging media, Fasson-brand self-adhesive materials, peel-and-stick postage stamps, reflective highway safety products, labels for a wide variety of automotive, industrial and durable goods applications, brand identification and supply chain management products for the retail and apparel industries, and specialty tapes and polymers.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:

Commission ("EC"), Canadian Department of Justice, and Australian Competition and Consumer Commission investigations, into industry competitive practices and any related proceedings or lawsuits pertaining to these investigations or to the subject matter thereof or of the recently concluded investigation by the U.S. Department of Justice ("DOJ") (including purported class actions seeking treble damages for alleged unlawful competitive practices, and purported class actions related to alleged disclosure and fiduciary duty violations pertaining to alleged unlawful competitive practices, which were filed after the announcement of the DOJ investigation, as well as a likely fine by the EC in respect of certain employee misconduct in Europe); impact of potential violations of the U.S. Foreign Corrupt Practices Act based on issues in China; impact of epidemiological events on the economy and the Company's customers and suppliers; successful integration of acquisitions; financial condition and inventory strategies of customers; timely development and market acceptance of new products; fluctuations in demand affecting sales to customers; and other matters referred to in the Company's SEC filings.

The Company believes that the most significant risk factors that could affect its ability to achieve its stated financial expectations in the near-term include (1) potential adverse developments in legal proceedings and/or investigations, including possible fines, penalties, judgments or settlements; (2) the impact of economic conditions on underlying demand for the Company's products; (3) the impact of competitors' actions, including expansion in key markets, product offerings and pricing; (4) the impact of changes in raw material and energy-related costs and associated changes in selling prices; and (5) the ability of the Company to achieve and sustain targeted cost reductions.

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