APPENDIX 4
Memorandum submitted by Scottish &
Newcastle International Limited
Thank you for your recent letter and apologies
for not having replied earlier, but I have only just returned
from a business visit to the US.
Our involvement with China is extremely modest
and deliberately so, and in contrast to any of the other international
breweries, we have adopted a very individualistic and different
position.
We have invested no capital, but have concentrated
single-mindedly on developing a strong personal relationship which
has in turn, evolved into us granting a standard Licence to Brew
Agreement with Chongqing Brewery, now China's fifth largest brewery.
Other companies as you will be aware entered
China on the back of often massive capital investments, few of
which have thus far borne any significant fruit.
In these circumstances, we have not therefore
entered into any joint venture or into some of the more formal
type arrangements which would no doubt have necessitated much
greater commitment on our part for legal and other advices.
I am enclosing a copy of our in-house company
magazine which contains an interesting article on our activities
in Chongqing.
The second strand to our business is the development
of importation of Newcastle Brown Ale, which is a brand we have
grown internationally, over the last ten years, most notably in
the US, where it is now the 13th largest import.
That too, is a low key strategy, whereby our
vision is long term and our commitment small. We have just opened
a small representative office and have one employee based in Shanghai
and as the market evolves, so we hope and expect to see growth
materialise.
Frankly, we have not made use of any support
or assistance from the FCO for China or indeed, Hong Kong, but
at a political level we have enjoyed great support and interest
from the Scottish Office, particularly when it comes to attending
visits by relevant Chinese State Officials.
At a personal level, I have close links with
the Chinese Embassy in London and through our own resources, we
have developed very strong political connections in support of
our activity, particularly in Chongqing.
These comments may be not the least helpful,
but they do represent our present position. The British Ambassador
in China has visited the Chongqing Brewery on at least a couple
of occasions, so he is familiar with our innovative approach and
obviously offers any support or assistance.
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