egrep --exclude problem

[Yakov Lerner]

I am doing
          egrep --exclude=.svn -r foo .
but grep still prints matches under .svn subtree ?
Why ? What I am doing wrong ?

egrep v.2.5.1
testcase:
mkdir /tmp/1; cd /tmp/1
mkdir .svn; echo foo >.svn/abc
egrep --exclude=.svn -r foo .
Output:
./.svn/abc:foo

Thanks
Yakov