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Situation 2 was one of three sublabels started as an alternative to the major distribution of Beggars Banquet in the U.K., the other two being 4.A.D. and Don't Fall off the Mountain. The artist roster reflects what was happening at the time in the growing 'Indie' scene.

The label was dissolved in 1992, and many of the label's bands found their releases being issued on the parent label Beggars Banquet.

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