SEC Form 4

FORM 4		UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934 or Section 30(h) of the Investment Company Act of 1940	OMB APPROVAL OMB Number: 3235-0287 Estimated average burden hours per response: 0.5
	Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

1. Name and Address of Reporting Person* SMOLYANSKY EDWARD (Last) (First) (Middle) 6431 OAKTON ST. (Street) MORTON GROVE IL 60053 (City) (State) (Zip)	2. Issuer Name and Ticker or Trading Symbol LIFEWAY FOODS INC [ LWAY ]	5. Relationship of Reporting Person(s) to Issuer (Check all applicable) Director 10% Owner X Officer (give title below) Other (specify below) Controller
	3. Date of Earliest Transaction (Month/Day/Year) 07/30/2004
	4. If Amendment, Date of Original Filed (Month/Day/Year)	6. Individual or Joint/Group Filing (Check Applicable Line) X Form filed by One Reporting Person Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
			Code	V	Amount	(A) or (D)	Price
Common stock, no par value	07/30/2004		S		300	D	$13.47	1,503,323	D
Common stock, no par value	07/30/2004		S		50	D	$13.47	1,503,273	D
Common stock, no par value	07/30/2004		S		150	D	$13.47	1,503,123	D

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
				Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares

Explanation of Responses:

Remarks:

The aggregate number of shares sold by Edward Smolyansky on July 30, 2004 and reported on this Form 4 was 500. Prior to the transactions reported on this Form 4, Edward's direct holdings were 109,398 shares and his indirect holdings were 1,394,225. Following the transactions reported on this Form 4, Edward's direct holdings were 108,898 shares and his indirect holdings were unchanged. Edward indirectly beneficially owns 1,394,225 shares as a result of his indirect pecuniary interest in LWAY shares held in the Estate of Michael Smolyansky, Edward's father and the founder and former President and CEO of LWAY. On 3/5/2003, pursuant to the Illinois Probate Act and the Internal Revenue Code, Edward filed a disclaimer (the "Disclaimer") wherein he disclaimed his interest in the LWAY shares held by the Estate. The Disclaimer was filed in the Cook County, Illinois Circuit Court on 3/10/2003. As a result, Edward has no pecuniary interest in the Estate's LWAY shares. Further, he disclaims the indirect pecuniary interest in the Estate's LWAY shares attributable to him under Section 16 of the Securities Exchange Act of 1934.

	Edward Smolyansky	08/03/2004
	** Signature of Reporting Person	Date
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* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
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